Determining Insurable Value of "Not Brand New" Property

Determining the market value of your property or a prospective property isn't always easy and either is determining what the limits of insurance should be on that asset. So, what's the best way to determine the insurable value of your property if not by market value? When the property is new, the original cost of that property is pretty easy to determine for insurance policy sake but when buying an existing property the valuation process isn't straightforward.

For the properties that are not brand new, you can always have the property professionally appraised but if that is not feasible you can always adjust the original cost figures and index those figures to determine the insurable values.

Another method, which is often used when the original cost data is not available, is to use a square footage multiplier approach. It also helps to consult with somebody who is familiar with comparable properties in that geographic area and who knows the market place for your property class (A, B, C, D etc...).

Purchasing inadequate insurance limits to keep the cost down tends to defeat the purpose of buying the insurance in the first place.

If you are in the process of purchasing additional assets and would like us to help with the due diligence process as well as help you determine the proper limit levels, please do not hesitate to reach out.