C2C Property, Land & Asset Valuations - Products
Insurance Valuation
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The improvements on a property are usually insured against unfortunate events such as fire and “acts of God”. The improvements to the property need to be fully insured for full replacement cost, as most insurance policies include an average clause. The average clause is applied when the amount insured is less than the replacement cost. This average clause states something to the effect that if there is total destruction of the improvements then only the sum insured will be paid out. Should there be partial destruction to the property, a percentage of the replacement cost will be paid out. This percentage is calculated by dividing the actual replacement cost by the sum insured and the result is the percentage of the claim that will be paid.