Real Estate Appraisal Forum

appraisersforum.com logo
The Premiere Online Community for Real Estate Appraisers!
 Fastest Way to Find a Real Estate Appraiser Enter Zip Code:
 
 
Go Back   Appraisers Forum > Real Estate Appraisal Forums > General Appraisal Discussion
Register Help Our Rules Calendar Archives Mark Forums Read


Closed Thread
 
Thread Tools
  #1  
Old 10-18-2010, 10:25 AM
YFA72 YFA72 is offline
 
Join Date: Jul 2010
State: Florida
Professional Status: Certified Residential Appraiser
Posts: 22
Default Insurance Value?

We have a request to estimate Insurance Value. M&S/Local Costs seem to be obvious & valid sources of data. But what format for the report is appropriate?
Sponsored Links

  #2  
Old 10-18-2010, 10:38 AM
Michigan CG's Avatar
Michigan CG Michigan CG is offline
 
Join Date: Nov 2006
State: Michigan
Professional Status: Certified General Appraiser
Posts: 16,132
Default

Quote:
Originally Posted by YFA72 View Post
We have a request to estimate Insurance Value. M&S/Local Costs seem to be obvious & valid sources of data. But what format for the report is appropriate?
Be very careful to check the disclaimers on Marshall and Swift.........
__________________
You do not know what you do not know.
  #3  
Old 10-18-2010, 11:24 AM
Elliott's Avatar
Elliott Elliott is online now
 
Join Date: Apr 2002
Location: Pumpland
State: Oregon
Professional Status: Certified General Appraiser
Posts: 10,795
Default

"Insurance Value"....guess it depends on how the policy reads. It could be
ultimately based on 'market value' or 'replacement cost' or 'reproduction cost.'
I'd go survey 3 builders and find out what their build costs are for a house
similar to your subject and use the high end of the range.
  #4  
Old 10-18-2010, 11:32 AM
Terrel L. Shields's Avatar
Terrel L. Shields Terrel L. Shields is offline
 
Join Date: May 2002
Location: Springtown, AmeRica
State: Arkansas
Professional Status: Certified General Appraiser
Posts: 37,671
Default

Many insurance estimating programs use something called "Reconstruction Value"....and it will be substantially higher than Replacement Cost New...about 20% more
__________________
I yearn to say "goodbye" - Madonna
  #5  
Old 10-18-2010, 03:28 PM
BOCK FOLKEN BOCK FOLKEN is offline
 
Join Date: Jun 2005
Location: N. Central Florida
State: Florida
Professional Status: Certified Residential Appraiser
Posts: 579
Default

Quote:
Originally Posted by Terrel L. Shields View Post
Many insurance estimating programs use something called "Reconstruction Value"....and it will be substantially higher than Replacement Cost New...about 20% more
Ditto to this. Standard M&S wont get you there. I'd go with the suggestion of getting builder quotes. Also, as it has been explained to me by my agent, the insurance value also attempts to take into account the potential that in a natural disaster, the system will be over taxed and the labor and materials costs will go WAY UP.

For example, I know a recent cost example where the insurance value was $530,000 for the house. The M&S value for the same house was $325,000. The insurer finally accepted the figure of $425,000 because the owner did not want to pay the ridiculous premium for $530,000.
  #6  
Old 10-18-2010, 03:42 PM
nauthead's Avatar
nauthead nauthead is offline
 
Join Date: Nov 2004
Location: Stink Key, FL
State: Florida
Professional Status: Certified General Appraiser
Posts: 1,526
Default

M&S has a specific software for this type of cost. If you use the regular M&S you are violating the end user license agreement so be careful how you handle this. Fannie Mae forms or the GP form are not a good idea. A narrative format is what I use.
__________________
I love you, the check's in the mail, if you like your insurance plan you can keep it.
  #7  
Old 10-18-2010, 03:44 PM
Terrel L. Shields's Avatar
Terrel L. Shields Terrel L. Shields is offline
 
Join Date: May 2002
Location: Springtown, AmeRica
State: Arkansas
Professional Status: Certified General Appraiser
Posts: 37,671
Default

The old M & S Boeckh system converted most of Boeckh to insurance. Boeckh software alllowed for each use. And, yes, it assumes that reconstruction will be more expensive than if the building was never there which is the premise of Replacement Cost
__________________
I yearn to say "goodbye" - Madonna
  #8  
Old 10-19-2010, 08:20 AM
Zambendorf Zambendorf is offline
 
Join Date: Jul 2008
State: Florida
Professional Status: IT Professional-Appraisal Related
Posts: 94
Default Insurance Tools

You can access the Marshall & Swift/Boeckh insurance valuation tool for residential properties at accucoverage.com ($8).
You can cross-check at e2value.com, especially if its a high valued home.

Asking the local builder will be inadequate.
- builders typically think in terms of new construction, not reconstruction.
- builders estimates (and M&S) is based on economies of scale with tract home construction, not applicable for loss recovery
- while the builder would give you a cheap estimate because of the current economic climate (appropriate for cost approach) - what they'd charge when there's a smoking hole in the ground and the buyer is desperate and the insurance company has the checkbook are miles apart
- the client needs documentation they can present to the underwriter that will be acceptable - insurance companies use MSB tools (not M&S)

Don't deduct for the foundation unless you've read the policy to verify its not covered (and it should be covered if the agent is doing their job).

Check your E&O to verify you're covered for this type of project - don't assume.
  #9  
Old 10-19-2010, 08:32 AM
Denis DeSaix Denis DeSaix is offline
 
Join Date: May 2005
Location: Northern California
State: California
Professional Status: Certified General Appraiser
Posts: 13,761
Default

Bluebook, which started out as an insurance cost estimator, also provides a product for appraisers. There is an appraiser-module report that is titled "insurable interest" that can be used (as far as I know) for insurable value.

Of course, they also have very specific insurance estimators as well.

Here's their link: http://www.bluebook.net/solutions/ap...inspectors.php

I've used this product for two-years and am very satisfied with it. You can call them and describe your situation; they'll be happy to tell you if they have a product that suits your needs.


Good luck!
Sponsored Links

Closed Thread


Thread Tools

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Forum Jump




Copyright © 2000-, AppraisersForum.com, All Rights Reserved
     Terms of Use  Privacy Policy
AppraisersForum.com is proudly hosted by the folks at AppraiserSites.com

Fastest Way to Find a Real Estate Appraiser Enter Zip Code:
Partner Sites:
AppraiserUSA.com - National Appraiser Directory AllDomainsUSA.com - Domain Name Registration
DeadbeatListings.com - Deadbeat ListingsAppraiserSites.com - Web Hosting for the Professional Real Estate Appraiser
Find FHA Appraisers - FHA Appraiser Search Commercial Appraisers - Commercial Appraiser Search
Relocation Appraisal - Find Relocation Appraisers Domain Reseller - Business Opportunity
Home Security Buzz - Home Security Info Radon Testing - Radon Gas Info
My Medicare Forum - Medicare Info Stop Smoking Help - Help Quitting Smoking
CordlessPhoneStore.com - Great Cordless Phones AndroidTabletCity.com - Android Tablet Computers

Follow AppraisersForum.com:          Find us on Facebook            Follow us on Twitter


All times are GMT -5. The time now is 11:59 PM.

SiteMap: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 52, 53, 54, 55, 56, 57, 58, 59, 60, 61, 62, 63, 64, 65, 66, 67, 68, 69, 70, 71, 72, 73, 74, 75, 76, 77, 78, 79, 80, 81, 82, 83, 84, 85, 86, 87, 88, 89, 90, 91, 92, 93