An Insurance Appraisal, commonly referred to as a Replacement Cost New (RCN) Appraisal, is used to determine a property’s new replacement cost. In other words, this type of valuation is used to determine how much it would cost to build a new substitute building if the original one were to be damaged or destroyed in a fire or other disaster.
Insurance Appraisals can be beneficial for both homeowners and commercial businesses. They can be used to evaluate residential homes, apartment and condo complexes, and commercial buildings.
Why Consider an Insurance Appraisal?
Insurance Appraisals are the best way to ensure that your property is not over or under insured. Though it may not come across as important, having adequate coverage is incredibly important in both residential and commercial applications. Being underinsured can result in an unpleasant surprise in the event of a fire or another disaster and can impact even much smaller claims due to a common coverage known as co-insurance. You may end up having to pay for part of your claim out of pocket if you were under-insured, adding stress to an already stressful situation. Being over-insured results in paying more than necessary for your insurance coverage, taking hard-earned money out of your pocket with no added benefit.
Your may want to consider an Insurance Appraisal if you have done renovations to your house or live in a high-end executive home with custom features. Depending on the type of renovations you make, they can impact the value of your property. Something as simple as adding a pool or high-end HVAC system can have an impact on replacement value. A valuation may also identify what aspects of your property are not included in your insurance coverage. From this information you can determine if you should take out insurance policies on individual items of significant value.
Condominium owners, boards and their property managers need to ensure that the replacement cost of the structures is accurate and current. It is considered a best practice to have an update done annually.
An Insurance Appraisal may be considered by an insurance agent to evaluate a structure or property that is unique or unusual and does not fall within their standard cost structures. This allows an insurance agent to determine to coverage that your property needs and what the insurance costs should be.
Northern Lights Appraisals has years of experience in handling Insurance Appraisals. Our team has the knowledge and understanding of both the real estate and insurance industries that is required in order to provide you with accurate information. Whether you are a property manager, condominium board member, insurance agent or a property owner wanting to ensure their insurance coverage is adequate and appropriate, our team can help.
Get it touch with us today to set up a free, no-obligation consultation and a quote for an Insurance Appraisal.