Insurable Value

May 11, 2023

The team of licensed appraisers at Valbridge Property Advisors | Orlando | Tampa | Jacksonville provides independent property valuation and consulting services, including insurable value / replacement cost valuations. Read on to learn more about insurable value and its importance for HOAs and COAs in Florida.

What is insurable value?

Insurable value is the estimated dollar amount for which a commercial property would need to be insured to fully protect it against potential losses or damages.

Does an association need an insurable value appraisal?

The State of Florida’s Condominium Act (Florida Statutes Chapter 718.111[11]) requires condominium associations to have an independently prepared insurable value appraisal every three years. 

Even without the legal requirement, it is generally considered good practice for condo associations to obtain an insurable value appraisal at a minimum of every three years to ensure that they have adequate insurance coverage for their property and assets. Some insurers, such as Citizens Insurance, have taken this a step further by requiring inspections every three years as well as desktop evaluations conducted annually to update construction costs. 

Obtaining an insurable value appraisal is instrumental in the owners’ association defining the replacement cost of its buildings, common areas, and other assets, which will determine the appropriate level of insurance coverage to purchase.

What do insurable value appraisals take into account?

Insurable value appraisals typically take into account a variety of factors, including theproperty’s construction materials, size, age, condition and topography.

Insurable value appraisals reflect the estimated current construction cost of an existing building based on the premise that it is built in its entirety as a single project. This often includes replacement cost less basement excavation, foundation, underground piping and architect’s fees.

Why VPA for your COA or HOA?

Insurers only accept reports from professionals they deem qualified. At Valbridge Property Advisors | Orlando | Tampa | Jacksonville, our licensed staff have successfully completed thousands of insurable value appraisals, including appraisals for Citizens Insurance, which has the most stringent standards in the industry.​ Licensed appraisers are the only specifically named professional group that are permitted by Citizens Insurance to provide insurable valuations.

In addition, ​ all non-licensed alternative providers must be confirmed as a party Citizens Insurance will accept.​ ​ Citizens Insurance also requires that Florida licensed appraisers must use software designed for insurance replacement-cost purposes (e.g., Xactware 360Value®, Marshall & Swift Commercial Estimator®) and be the most current version of that tool. Manually calculated estimates and appraiser developed spreadsheets will not be accepted.

What sets Valbridge Property Advisors | Orlando | Tampa | Jacksonville apart?

With tens of thousands of insurable value appraisals completed annually, Valbridge Property Advisors | Orlando | Tampa | Jacksonville is a national leader within the insurable valuation space. Our staff routinely provides detailed, building-by-building cost estimates to some of the largest associations in Florida and across the country. While not required by the insurers, each Valbridge insurable value appraisal is reviewed by a certified general appraiser who also holds the prestigious MAI designation of the Appraisal Institute. Thus, you can rest assured that not only will your report be prepared by a licensed appraiser, but it will be certified by an appraiser with the highest level of licensure in Florida.

Do you have additional questions about insurable value? If so, please consider Valbridge Property Advisors | Orlando | Tampa | Jacksonville  for all of your commercial appraisal, valuation and consulting needs. We invite you to give us a call toll free at 844-822-7825 and dial extension 1.

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