Replacement Cost Appraisals
Cost Protection Through Accurate Appraisals
What is a Replacement Cost Estimator? Both commercial and residential buildings go through a process using an estimating software tool used by insurance companies to estimate the cost to rebuild your home in the event of a total loss. You will see this cost estimate on your insurance policy under Dwelling Coverage or Coverage A. Commercial properties need updated replacement cost reports every three years. Homes vary upon the carrier insuring the property. Floridian has over fifteen years of experience completing replacement cost estimate reports. Other industry names for this service are also Insurance Appraisal, Replacement cost Appraisal, and a Replacement Cost Estimator. Approved estimating software’s are Marshall Swift/ Core Logic, RSMeans Data, and 360Value estimating software.
What is replacement cost as it applies to the insurance policy? Recommended over actual cash value, replacement cost coverage insures a home for the estimated cost to reconstruct an exact duplicate or replica of the building at current prices. The costs assume use of like kind and quality materials, construction standards, design, layout and quality of workmanship.
To clarify what the cost implies, the insurable replacement cost is better explained as reconstruction cost. Also worth mentioning, the replacement cost on an insurance policy need not account for depreciation or land value, as does the replacement cost estimate of a cost approach appraisal. After all, in the event of a total loss, depreciation and land value have no influence on the cost to reconstruct a replica of the lost structure. And depending on the local market, reconstruction cost could be more or less than the current market value of the structure.
The following are included in replacement cost new (as defined in the appraisal):
Plans, specifications, surveys and building permits; material and labor costs, including all appropriate local, provincial and federal sales taxes; normal site preparation, including finish, grading and excavation for foundation and backfill for the structures only; utilities from structure to lot line figured for typical setback (not included with mobile or manufactured homes); contractors’ overhead and profit; depreciation; estimated land value.
The following are included in replacement/reconstruction cost (as defined in the insurance policy): All the above mentioned inclusive of replacement cost new, except for depreciation and land value; current building codes; reuse of building components or mechanical systems below grade level; loss of economies of scale associated with new construction; extra costs due to site accessibility; higher labor costs and premium prices for materials; extraordinary fees and other contingencies.
This service calls for a knowledgeable veteran that has a substantial experience in completing difficult and extraordinary properties to ensure that the client is not under insured but also not over insured and paying premium dollars that is unnecessary. We get you accurately covered the first time. After that our renewal offer for updating is only $400 if ordered with in the three-year period.
