There is more than one path a property owner may take in determining property insurance limits and these various paths result in different insurance programs, thus different costs. Likely the most common path today would be the respected Industry Property Modeling results, normally calculated by insurers or underwriters in a very important attempt to price the risk before them. Industry Property Modeling will analyze and produce by peril (i.e. the various causes of loss or events that may occur) an expected average loss number and the standard deviation from this average. For example:
These figures are calculated from the property owner’s list of claims or losses and current exposures or property values that are at risk. While assisting an underwriter with pricing an account, the problem still persists with these figures doing very little in the way of helping an Insured set appropriate policy limits.
Limit Batching has proved effective in helping decisionmakers set blanket Property Occurrence limits that consider the full portfolio of exposures. Limit Batching is ultimately an intuitive web-based program that enables clients to view their portfolio in an interactive environment online and zoom in on the details of each individual address. This batching environment highlights exposures to hurricane, earthquake, low and high hazard flood zones, and more, allowing for a convenient strategy to set limits encompassing the full portfolio and all perils at play. For more information on the importance of Property Modeling and Limit Batching, and the difference Limit Batching can make in setting appropriate limits, please contact the AssuredPartners Real Estate Team.