Ensuring coverage measures up by cost per square foot

October 24, 2019 / 1 min read

Verisk is adding a useful new feature to the 360Value^® replacement cost estimating platform to help underwriters spot potentially undervalued homes. The new feature indicates whether a replacement cost estimate is within the norm for the residence being estimated—helping ensure that customers receive adequate coverage. A check and warning message alerts users when the calculated replacement cost estimate for an individual home is less than either the average or lowest reasonable cost per square foot based on the 360Value dataset for the area where the home is located.

GettyImages-483773163_web

These values for average or lowest reasonable cost per square foot are derived from the baseline data set from Verisk’s 360Value Home Characteristics Study. The study includes more than 200,000 valuations that incorporate 32 common characteristics for homes of varying quality, from economy to high value.

Easy to implement into workflows

For 360Value customers that wish to implement this new feature, a warning message will appear when a replacement cost estimate for a property falls below the average or lowest reasonable value for the pricing area. Users then have the option of updating the home characteristics that were entered for the property via the “Fix Now” button. Or they may choose to ignore the alert and continue with the replacement cost as estimated.

In addition to a warning in the user interface, the cost per square foot values will be returned in the structure data of the 360Value response report. Insurers can compare this value to the cost per square foot of the total structure to determine whether additional action such as underwriter review or a third-party inspection is needed.