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Stronger underwriting-claims link is boon to residential property insurance

Lower interest rates and a pandemic-fueled home-buying surge have contributed to increased building activity as homeowners spruce up their properties, leading to rising demand for materials and labor. Lumber prices alone have recently surged a historic 162 percent in the United States.

Enhance Your Property Underwriting With Claims Based Data

Seeking to enhance the already strong connection between underwriting and claims, Verisk is providing insurers with a new avenue to indicate the need for a possible updated replacement cost estimate.

Pre-pandemic Verisk research shows that when insurers apply a factor or fixed percentage increase at renewal, property valuations can be off an average of 4 percent just three years after the original calculation. Not updating individual building costs of each property over the life of the policy—especially in light of the current historic price increases for materials and labor—could mean the property isn’t fully protected in the event of a total loss.

Seeking to enhance the already strong connection between underwriting and claims, Verisk is providing insurers with a new avenue to indicate potential need for an updated replacement cost estimate. When an insurer sends an adjuster on site for a large loss claim—whether it’s a kitchen fire or storm damage to a roof—the adjuster can use the opportunity to verify critical property details.

This could be the first time an insurer representative has eyes on-site since the initial underwriting inspection at bind. The new integration of Verisk’s InsurTech platforms—360Value® and Xactimate®—gives claims adjusters an easy way to alert underwriting to potential discrepancies between what’s on a homeowner’s policy and what they notice in person. For example, an adjuster might see the coverage lists builder-grade finishes, but the kitchen has premium cabinetry, professional-quality appliances, and marble flooring.

A new tool in Xactimate allows claims adjusters to note if any of the nine key property characteristics that most strongly affect the accuracy of a replacement cost estimate may not align with the customer’s current coverage. This data is fed back to 360Value to cue underwriting to adjust the valuation if necessary—protecting customers and their homes if the worst should occur.

This latest integration creates a circle of knowledge that can better protect policyholders in the event of a loss and can help insurers collect premiums that reflect their true exposure.

While the customer’s hardship when a home is damaged or destroyed can’t be measured solely in dollars, helping policyholders secure the right insurance coverage can help them weather the loss.

To learn more about the Verisk claims and underwriting ecosystem, view our on-demand webinar Enhance Your Property Underwriting with Claims-Based Data.


Trish Hopkinson

Trish Hopkinson is product director, 360Value personal lines, for Verisk. You can reach Trish at thopkinson@verisk.com.


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