Flood Insurance Cost Valuation

Insurance Valuations

The Purpose

The purpose of the Flood Insurance Replacement Cost Valuation is to determine the correct amount of insurance the association needs to carry in order to comply with the type of flood insurance policy being purchased by the association or entity.

The flood insurance replacement cost valuation is not a real estate appraisal. A real estate appraisal and a flood insurance valuation have two different objectives. Most real estate appraisals are used to purchase property.
All Flood Insurance Valuations are used to determine the cost of reconstructing a property according to the type of flood insurance policy coverage. The flood policies are usually issued by FEMA. There are different types of policies for different types of property as listed under the National Flood Insurance Program. The most common flood insurance program for condominium associations is the Residential Condominium Building Association Policy (RCBAP).

The RCBAP for flood insurance covers more property than the typical Florida property insurance policy for condominium associations. The flood insurance policy makes different assumptions as to what is an insurable building location. This is important in order to identify the covered property under RCBAP and meet all insurable aspects of the policy, plus carry the correct amount of flood insurance coverage.

What We Do

What we do starts with an onsite inspection of the property to be valued. Typically we meet with the property manager or responsible party to review the property owned by the association or corporation and determine the intended use of the valuation. We list all property to be included and collect field data on each of the insurable property locations. A detailed sketch of the major building locations and RCBAP determined building sections is completed along with the details on all other insurable property. Photographs are taken of the insurable property.

We complete quantity calculations on the data collected for each piece of insurable property and develop the estimated insurable replacement cost for each insurable asset. We use the segregated cost method to establish replacement cost along with input from local builders and contractors. All insurable assets are listed in a summary format with their respective estimated replacement cost. This information is coupled with a narrative description of the property, property condition, photographs, plus construction and insurance underwriting information, which is needed in order to properly understand the overall flood insurable risk to produce the Flood Insurance Replacement Cost Valuation Report.

We recommend updating all Flood Insurance Valuations every two-three years.