What is the purpose of an insurance valuation report?
PURPOSE OF REPORT: To provide an Insurance Valuation report of the property comprising the buildings and improvements as required by the Owners Corporation Act 2006 (“the act”), being the Lots and Common Property in Registered Plan No. Xxxxxx. DATE OF INSPECTION & VALUATION: XthXxx, XXXX
What’s the difference between property insurance and valuation?
A vigorous debate has opened up between property owners and insurance companies on how to properly insured homes and buildings. It might appear at first that there is a discrepancy between the valuation insurance companies use to provide insurance coverage for your dwelling and the valuation your local tax department has affixed to your property.
What is the capitalization rate of an insurance agency?
The capitalization rate is similar to the return on investment (ROI) that an investor would demand if buying the agency. It consists of the risk-free rate and the risk rate for independent insurance agencies. The risk-free rate is the rate on U.S. Government Treasury Bonds of proper duration.
What should the value of an insurance agency be?
Total agency values usually range from.5 to 4.0 times revenues — a huge range. To assume that your agency falls exactly in the middle is simplistic and unrealistic. For example, an agent recently said that his agency should sell for 1.5 times revenues because that’s what agencies in his area were selling for.
What kind of valuation does an insurance company use?
Insurance companies use two other method of valuation: Actual Cash Value. Let’s explain. Insurance companies cannot rely upon the fluctuations in market value to assure that we can repair or replace the dwelling structure.
How is the value of a property determined by insurance?
While confusing, insurance concerns itself with two methods of valuation and ignores the market value that local tax offices may be reporting on your tax bill. The two different valuation methods we use shouldn’t be confusing and you need to set market valuations determined by your property tax officials off by itself.
Total agency values usually range from.5 to 4.0 times revenues — a huge range. To assume that your agency falls exactly in the middle is simplistic and unrealistic. For example, an agent recently said that his agency should sell for 1.5 times revenues because that’s what agencies in his area were selling for.
The capitalization rate is similar to the return on investment (ROI) that an investor would demand if buying the agency. It consists of the risk-free rate and the risk rate for independent insurance agencies. The risk-free rate is the rate on U.S. Government Treasury Bonds of proper duration.
