national conference for insurance managers in higher education

National Conference for Insurance Managers in Higher

Education

The Valuation of Buildings for Insurance Purposes

Martyn Barrett BSc MRICS ACII FCILA FUEDI-ELAE

Objectives• The scale of the under insurance problem• How has it come about?• What is the impact at the time of claim?• Valuations for insurance purposes

Anatomy of the modern university• Core of historic buildings• Sprawling campuses and off site buildings• Residential blocks, labs, research and offices• Buildings of outstanding quality, design and cost• Iconic buildings emphasise status • Acquisitive-property owners of vast portfolios• High quality permanent fixtures to buildings• Legal, estates, finance and admin departments

with interest and responsibilities for insurance.

BCH 2007 statistics for one insurer scheme:

94%

BCH 2007 statistics for one insurer scheme:

Average increase:

78%

Why?

Why is there under-insurance?● Origin often surrounded in mystery● Rules of thumb● ‘It will never happen to us’● Blanket cover● Market/bank/finance valuations● Incorrect base figure● Failure to update previous valuations ● Indexation inappropriate for buildings● Deliberate to save premium!!!

What if?

Impact of under-insurance:● Condition of average● Limited to sum insured● Delay in reinstatement and con losses● Modern materials cover insufficient● Arguments, hassle and disappointment● Loss of reputation of university● PI claim/litigation/witch hunt?

Benefits of valuation:● Significantly reduces risk of underinsurance● Insurer receives, policyholder pays the correct premium ● In the event of a claim, adjuster can immediately focus on

the claim, rather than any underinsurance issue, which might delay the repair process and lead to unrecoverable increased costs

Valuing for Insurance Purposes:● Measure and record, size, height, shape and layout● Quality – materials used, standard of workmanship● Age - listed?● Demolitions● Removal of debris● Fees● Compliance-Part L etc ● VAT

Valuing for Insurance Purposes:Externals● Drainage● Roads, car parks, pavings● Lighting● Walls, fencing● Ancillary structures

Valuing for Insurance Purposes:Location factors:● Regional, campus, city centre, remote etc.● Access● Proximity of other buildings● Slope of site● Conservation Area● Specific vs.text book/desk top

Underinsurance:

Underinsurance:

Underinsurance:

Underinsurance:

Underinsurance:

Peace of Mind

Contact details:

● Martyn Barrett BSc MRICS FCILA FUEDI-ELAE 07984 644444 martyn@bch.uk.com

● Office: 35A Southover, Wells, Somerset BA5 IUH 01749 679145 info@bch.uk.com