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Insurance Valuation Risk Pools


Since the inception of governmental risk pooling more than 30 years ago, it is now estimated that 80% of the cities, towns, schools, counties and special districts in the United States address some or all of their risk management and risk financing needs through member-owned, member-governed, nonprofit risk pools.

Risk pools come in many different sizes and configurations, from schools to universities and towns to statewide governments, often encompassing many thousands of buildings and structures. Based on a survey conducted by the Association of Governmental Risk Insurance Pools (AGRIP) in 2009, approximately 68% of the pools surveyed have implemented formal programs for the appraisal of their members’ insured properties. The challenges faced by risk pool managers that drive the necessity for appraisal programs include:

  • Ensuring uniform reporting of property values to facilitate an equitable allocation of the related premiums
  • Confirming the completeness of the schedules of properties submitted by members
  • Reporting accurate primary construction, occupancy, protection and exposure (COPE) data for underwriting purposes
  • Collecting and analyzing secondary COPE data (windstorm and earthquake)
  • Establishing a baseline valuation of all member properties
  • Valuing properties of new pool members
  • Pressure from underwriters for support of property valuation
  • Offering property valuation as a service to attract new members
  • Determining insurable values for challenging occupancies including state capitols, cathedrals and public utilities

Our services

American Appraisal’s insurance valuations address all of the issues that regularly challenge pool executives. Our services include:

  • Building and land improvement insurance valuation
  • Detailed personal property inventory and valuation
  • Primary and secondary COPE data analysis
  • Annual updating
  • Post-loss services for claims assistance
  • Secure eRISK® Web-based reporting system allowing detailed viewing, sorting and filtering of insurance appraisal data

Our expertise

With 30 years of experience serving risk pools, American Appraisal is well equipped to deal with the challenges of conducting insurance appraisals for such large groups of properties. We can guide risk pool executives through the critical project phases to a successful conclusion, which might include:

Preplanning – This should start early, as soon as renewal is completed or even before.

Preparing an accurate statement of values for all buildings to be appraised – Valuation consultants base fees on the number, value and type of properties.

Determining which properties should be appraised – Options include all properties or only those above a predetermined value cut-off.

Setting a time frame for completion – Typically, pools opt for an ongoing program spread over three to five years.

Determining the scope of the valuation services required – The pool executive, broker and underwriter should be involved in determining the scope to ensure that the final appraisal will be optimized for underwriting purposes. A minimum scope includes a property inspection and measurement, as we frequently find that current building areas/dimensions are incorrect.

Determining the standard of value required – The standard of value should mirror policy language.

Conducting a pilot appraisal – The pilot appraisal is an important stage of the process, providing an opportunity to fine tune the appraisal procedures and make any scope adjustments.

Communicating – Communication to members concerning the appraisal process and their role is vital - while scope is determined by pool executives, it should be supported and understood by individual members.

Coordinating site inspections – Pool executives might have a preference as to the order of site inspections, or they might leave that decision to the consultant.

Performing site inspections – Valuation consultants will conduct the on-site inspections according to the project scope, and verify the supplied building listings, adding or removing buildings as found.

Reporting – Results will be provided to pool executives and members as outlined in the engagement scope.

Once completed, the appraisal process benefits the pool by:

  • Determining of the accuracy of current coverage - Verified and updated building listing

- Accuracy of values

- No surprises at the time of loss

  • Improving risk management with a consistent approach to the quantification of risk
  • Improving marketability to underwriters
  • Serving as a basis for an equitable allocation of premiums to members
  • Serving as a basis for preparation of “proof of loss” documentation

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