Replacement Cost Valuation
Your insurance carrier assigns a valuation for replacement cost in the event of a catastrophic loss. This is called a replacement cost valuation. Your premium expense is based, in part, on this value.
Many homeowners are shocked at this valuation which always exceeds the Fair Market Value or the actual cost to rebuild. Carriers include many anticipated expenses in the valuation, aside from reconstruction costs. All of these added expenses are not made public.
Replacement Cost Valuation FAQ’s
It means higher premium expense based upon the carrier’s valuation. Replacement cost valuations are not a set value; they seem to be arbitrary. For example, your home may be valued thousands of dollars higher than the exact same home in your subdivision.
Florida law allows you to contest the valuation. You may, at your expense, hire a Certified General Contractor, residential appraiser, architect or registered engineer to prepare a replacement cost valuation. You should only hire those professionals who regularly engage in this work and who are familiar with the program requirements.
Typically, we see benefit to high value homes or homes over 4,000 sf. We also see benefit to homes in dense, urban areas or specialty homes such as log homes. We have helped homeowners with homes under 1,000 sf which, for some unknown reason, were valued over $200,000.
Depending upon the variance in the valuation, the carrier will elect to accept the RCV, deny the RCV or attempt to negotiate a middle ground. Florida statutes intend that the carrier will accept the RCV if provided by a competent discipline noted above; however, the carriers do not always comply with the intent of the law.
We suspect, in some cases, the carrier did not want the policy to begin with and it has appeared the valuation was overstated to compensate for their desire to not insure the property. We have seen this in low value homes, older homes, small/older commercial properties and coastal properties. We have also seen this in high value homes although we are not exactly sure why this occurred; we suspect it has something to do with high value roofs.
You may elect to protest their decision with the Florida Office of Insurance Regulation, seek another carrier or hire an attorney to represent you.
Fees are based upon the size and complexity of the home for a full RCV. To assist homeowners, we offer a low cost, yet thorough, computer generated RCV by a service provider which is acceptable to the carriers in Florida. This is not a fully comprehensive RCV as it does not include a physical site assessment. You provide input data such as type of roof material, wall construction, flooring, etc..
We research building permits to verify age of roof, HVAC or other additions – unless a permit is on file, we will assume the components are original. We generate a report using current construction costs to arrive at the RCV.
Order our e2Value Replacement Cost Valuation report
Any home up to 2500sf – $ 59.00
Any home up to 4500sf – $ 129.00
Estate homes over 4500sf – $ 249.00
Home size is based upon the total square feet listed on the property appraiser website including garage and covered porches. Report is available for any residential home, anywhere in the USA.
Order a full RCV report for your home or office
Contact us for a free price quotation.