Insurance Journal Forums

Example: Customer does a telephone ITV with a MSB (Marshall & Swift/Boeckh) inpsector. Inspection comes through at $333,000 for replacement cost on the customer's home. Coverage A is $515,000 on the current policy. Do you automatically advise the customer they are overinsured and suggest lowering Coverage A? The customer has a replacement cost endorsement.

Not "automatically", but certainly warrants some investigation.

Where did the $515K come from (original purchase price or loan amount or prior ITV)?

Did the client give accurate details over the phone?

Since 2004, the company has increased Coverage A (for the insured's peace of mind) from $325,000 to $515,000.

After the phone ITV was done with the insured, the company sent us a letter saying,

"The survey indicates that the Coverage (A) limit listed on the policy appears more than adequate. While we will not
be initiating any changes to the policy at this time, we thought you would want to be aware of the report results. In spite of the fluctuating real estate market and the resultant decreases in the market value, the cost to rebuild a damaged home has increased approximately three percent during the last year alone. Indications are that this trend will continue in the future."

"Did the client give accurate details over the phone?" We mailed the report to the customer and asked that he verify all the information is correct. We are waiting for a response.

At present the cost to rebuild a home in Los Angeles county using the highest level of basic materials without going custom is just below $200 per square foot. Anything less would be okay all the way down to the minimum county standard which is somewhere around $130 per square foot.