New England Real Estate Journal
Many real estate property owners often think they should insure the building for what they paid for it. This however, does not take into consideration what would happen in the event of an insured property loss that requires rebuilding to the original like kind condition. What an owner “paid” for a building or what it might be “worth” in the open marketplace versus how much it might cost to rebuild the building for the “insured” value are not the same.
Property valuation modeling (also known as Total Insured Value modeling) is the process of using actuarial and construction data to estimate accurate replacement cost values on individual properties within a real estate portfolio. Property valuation modeling is especially applicable to helping understand the replacement cost of your real estate portfolios utilizing actuarial data, engineering, construction costs, and replacement cost resources such as Marshall and Swift.