Insurable Value Appraisals in Amarillo, Texas
In light of last year's spring wildfires in the Amarillo TX area, both property owners and insurers are making sure that both commercial and residential property insurance policies are up-to-date and provide sufficient coverage. Prior to making changes or renewing an insurance policy, the insurance company will request that an appraisal be completed to establish the insurable value of the property. The insurable value of a property is typically less than the fair market value of the property since is based upon the cost to replace any improvements such as the home on the property, as well as barns, stables or other structures. When selecting an appraiser, it is essential to make sure he or she has the experience and qualifications to perform this type of property valuation.
The insurable cost appraisal establishes the valuation of the property based upon what it would cost to replace any improvements to the property if they were destroyed on the date of the appraisal. In order to establish this value, the appraiser will inspect the property in question, review, all blueprints and plans, as well as any surveys Based upon the current cost of labor and materials, the appraiser will provide an opinion as to what it will cost to rebuild or replace the structures on the date of the appraisal.
The Importance of Having an Up-to-Date Insurable Value Appraisal
If the insurable value of a property is set too low, the property is likely to have significant out of pocket costs in the event a fire, flood, or other natural disaster destroys the property. On the other hand, if the insured value of the property is too high, the property owner can potentially pay thousands of dollars in premiums for insurance coverage that is not needed. Additionally, it is important make sure that the insured value on the property insurance policy is consistent with what is on the flood insurance policy. This will reduce the risk of disputes with the insurers in the event the structures on your property are destroyed by flood waters.