Insurance Appraisal and Valuation

Accurate Coverage Could Save You Thousands

Due to the current economic situation, construction rates have declined and so have replacement cost values in many areas.  This results in lower insurance premiums for our clients which saves them money.

We want to provide you with the most accurate appraisal available today using up to date cost data.  Contact us to see if your association could benefit from an updated insurance appraisal from LCAM resources.

Why is this Important?

Adequate insurance coverage is a major consideration and fiduciary responsiblity for the board of directors of community associations. The LCAM Resources Insurance Appraisal report is a comprehensive valuation tool that provides the most accurate replacement cost values, and is accepted by all insurance carriers.

Making the decision to complete a professional insurance appraisal is a wise investment that returns itself by setting an educated level of insurance coverage and thereby saving thousands by not over-insuring, and potentially saving millions by not under-insuring. This valuable tool ensures that your community assets will be protected.

	“I wanted to take this chance to thank you and your staff for the outstanding service you have given our company.  The extra mile that you went, the expertise you showed, and the efficiency and speed of your service all contribute to the reasons we have chosen you and your company to be our exclusive partner for all insurance appraisal work." - J.W., CEO, Property Management Co.

 

What is an Insurance Valuation?

The LCAM Resources insurance valuation report is a replacement cost analysis of the insurable assets of a community which may include residential buildings, recreation facilities, maintenance facilities, and property improvements such as gate systems, site walls, and light poles. Our goal is to help you determine the ideal amount of coverage you need.  Our clients include condominium associations and homeowner associations (HOA).  We also provide insurance appraisal services to apartments, high value residences, churches, and all types of commercial and investment properties.

• Accurate replacement cost values for both hazard and flood insurance coverage usingnationally renowned Marshall & Swift Valuation
• Information on hazard valuation, and flood valuation based on National Flood Insurance Program guidelines
• Compliance with all applicable insurance requirements
• Detailed construction analysis that conforms to insurance industry standards and protocols
• High-resoulution photographic exhibits

1. State Enabling Statute and Corporation Act: Your condominium, cooperative, or planned community may be subject to a specific state statute. If your association's incorporated, it may also be subject to the requirements of a state non-profit or business corporation statute.

2. Governing documents: In general, your governing documents can require more insurance coverage than your enabling statute, but they can't require less. Read your declaration or proprietary lease as well as your rules and regulations for more specific insurance requirements.

3. Government requirements: Local, state, and federal statutes sometimes require that you obtain, or at least consider obtaining, certain insurance coverages. At the local level, the most common one is ordinance or law insurance; at the state level, it's workers compensation and employers liability insurance; and, at the federal level, it's the National Flood Insurance Program (NFIP).

4. Secondary mortgage markets and lender requirements: FannieMae and FreddieMac, as well as agencies like FHA and VA, may require certain types of insurance before they will buy, insure, or guarantee a mortgage loan in your association. Meeting these requirements may enhance the marketability of units in your community.

5. Good business judgment: Even if steps 1-4 don't mention a certain kind of insurance, use your best judgment. The most overlooked insurance coverage is boiler and machinery insurance. It covers mechanical breakdown and electric arcing (you don't have to have a boiler!). Unfortunately, it's usually not mentioned in state statutes or governing documents.

Other Insurance Considerations

Your association may be responsible for insuring all the residential buildings in your community as well as equipment or property such as the swimming pool and pool house, and these tangible assets must be protected.

How Much and What Kind of Protection? Legally, how much insurance do you have to purchase? Practically, how much do you need to purchase? The answer will depend on whether you live in a planned community, a condominium association or a cooperative, so begin by checking your governing documents. Check resolutions also, which can be just as binding as recorded documents and may stipulate details such as deductible amounts.

Next be aware that local, state, and federal statutes may have a bearing on how much and what kinds of insurance your association must have. At the local level, pay attention to building codes and zoning ordinances. For example, if local zoning prohibits rebuilding in your area, the differences between actual cash value and replacement costs become important. The state will require workers compensation and unemployment insurance and the federal government will require Social Security if you employ anyone. And, if your community association is located in a flood area, you are required by federal law to participate in the National Flood Insurance Program or your homeowners will not be able to get mortgages from federally insured lenders.

Lenders, agencies, and professional organizations will also require certain levels of insurance coverage before they will do business with your association or people who want to live in it. For example, the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation will not mortgage homes in associations whose insurance programs don't meet their standards. The same is true of the Federal Housing Administration and Department of Veterans Administration, which will only insure or guarantee mortgages in associations with the required levels of coverage.

You are Responsible

What is your property worth? Before you can insure the association property, you must determine it's worth. But worth has different meanings, and there are numerous ways to assign it--market value, replacement cost value (RCV), actual cash value (ACV), investment value, and others.

You, as the insured, are responsible for determining value.  And the best way to do so is with an insurable replacement cost appraisal from LCAM Resources.  This appraisal becomes very important if your insurance carrier asks the association to sign a statement of value. Once you have paid for the initial cost of this appraisal it can be updated every year for a nominal fee.