Mortgagee/Loss Payee Valuation

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Posted: Sat Sep 20, 2008 11:49 am Post subject: Mortgagee/Loss Payee Valuation

Need a valuation formula (rule of thumb). Mortgagee requiring an increase in building/contents limits up to 90% of mortgage value. What say you?

STONE

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Posted: Mon Sep 22, 2008 2:04 pm Post subject:

Stone, this would be determined by the area, you know location, location, location...no way that I know of we could come up with that here...contact some high preforming realtors in your immediate area...they should be able to give you the rule of thumb re: appreciation of property in your area. _________________ "Never, never be afraid to do what's right, especially if the well being of a person or animal is at stake. Society's punishments are small compared to the wounds we inflict on our soul when we look the other way." Martin Luther King Jr.

Lori

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Posted: Tue Oct 07, 2008 7:57 pm Post subject: Valuation

The problem is the mortgage may also include the value of the land. A discussion should be had as to a replacement cost valuation rather than the mortgage value.

Compared

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Posted: Wed Oct 08, 2008 1:31 pm Post subject:

Doesn't most mortgages take into the consideration the lands value? I know mine does. It is sometimes a pretty big amount to.

fireyone

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Posted: Sat Nov 01, 2008 1:31 pm Post subject:

Thanks to all for the great feedback! Recently learned that mortgagee has the legal right to require "fair market value" for buildings limits. Now will consider the tax roll data as "FMV" at RPV with ordiance of law endorsement. Comments please. STONE

STONE

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Posted: Mon Dec 08, 2008 12:05 am Post subject:

The term Replacement-Cost has not been mentioned in this thread. It is important to remember that the purpose of the insurance for the property is to replace what has been lost. If only the market price of a property is considered in determining the value of the property for insurance reasons then there is a great chance that it is not insured propoerly. Example: Market value of a property is $112/sq.ft. but the replacement cost is $125/sq.ft.; if only insured for $112 there is a gap in coverage as the property is underinsured and would not meet the coinsurance requirement. _________________ Phil T. Brun Comercial Insurance Broker Kiely Hines & Associates 800-295-1897 Ext. 2756