Our Services

Insurance Companies

Equity appraisers often receives calls from homeowners and insurance companies to provide a cost approach with a home insurance appraisal to help establish “cost to reproduce.” These reports are often used to help establish premiums for hazard insurance.

Insurance companies for years have depended on real estate appraisals as a source for basing insurable value through cost estimates provided in the report. Lately you may have noticed the disclaimer on appraisal reports concerning the Cost Approach. The disclaimer typically notes that the Cost Approach in the appraisal report is not intended for use as “insurable value”.

The appraiser makes this statement because often very little time is spent on developing the cost approach in these reports. Guidelines from FNMA no longer require the appraiser to include a cost approach and almost full reliance is placed on the Market Approach in the appraiser’ s reconciliation.

We now offer a service for the insured. We will complete a cost approach from information we have compiled from local contractors. And the intended use for this approach will be for insurable value. The insured value will be for replacement cost not reproduction cost. Replacement cost is the estimated cost to build a home of equal utility, reasonably close in design. Typically extravagant or atypical upgrades are not included in our calculations.

The cost of this appraisal will depend upon the type of property and weather special assistance is necessary. Call our office for a fee quote.