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Insurance Appraisals 101

WHAT IS AN INSURANCE APPRAISAL?

A specialized report that provides an estimate for replacement cost value of a property. We call this Total Insurable Value (TIV). Property owners use the TIV to determine their insurance coverage in the case of a total loss. This is different from a market appraisal. 

DO I NEED ONE?

Yes, all properties should have an accurate and current replacement cost valuation provided by a professional insurance appraisal firm. 

Strata and Condo Corporations are required to obtain and maintain full replacement cost insurance on the building, the common facilities and any insurable improvements as outlined in their respective provincial Condominium or Strata Property Acts.  The adequacy of the insurance must be reviewed annually; only a professional insurance appraisal company can ensure compliance with this legal obligation.    

It is also critical for commercial and non-condo properties to obtain and maintain an adequate appraisal valuation annually to ensure that owners are insured to full replacement cost value.   Fluctuating construction costs, changing building codes and municipal bylaws, and other challenges necessitate a professional 3rd party insurance appraisal firm to determine the replacement cost value of the property.  

BOTTOM LINE:  A sufficient TIV and professional appraisal can provide confidence in the operational resiliency of buildings or assets in the event of a catastrophic loss.

WHAT ARE THE OTHER BENEFITS?

  • PEACE OF MIND

Rest assured that you have sufficient coverage if faced with a major disaster.

  • BETTER PREMIUMS + COVERAGE

An accurate replacement cost value ensures you only pay what you need to on insurance premiums. Plus, having a recent insurance appraisal may allow for more flexible terms with your insurance broker.

  • BUILDING MODERNIZATION

An accredited and professional appraiser will account for costs to bring older buildings up to current codes. This would include expenses for sprinkler systems, additional parking spaces, and handicapped access. 

HOW DO YOU DETERMINE THE TOTAL INSURABLE VALUE?

Normac uses local cost guides and our own in house costing research to determine TIV. TIV varies based on location and is broken down by:

  • Demolition and removal
  • Labour and professional fees
  • Materials to rebuild
  • Upgrade to current bylaws and building codes
  • Taxes
  • Inflation fluctuation

What kinds of properties do you appraise?

  • Lowrise and highrise apartment buildings
  • Townhouse complexes
  • Mixed use developments
  • Light industrial buildings 
  • Bareland properties
  • Home owner’s associations
  • Housing co-operatives
  • Government + senior’s housing
  • Places of worship
  • Malls and commercial developments
  • Hotels and resorts
  • And more!

What is included in the appraisal INSPECTION?

Structure

Foundation, frame, exterior + interior walls, roofing, interior finished, HVAC, electrical,
plumbing, lighting, fire protection equipments, elevators, parking, and more

Hard Landscaping

Pavement and walkways, curbs, retaining walls, fencing, lighting, patios,
underground services such as water, sewer, drainage, electrical, and more

Soft Lanscaping

Grass, shrubs, trees, irrigation systems, etc.

Common Elements

Swimming pools, jacuzzis, security systems, handicap lifts, etc

Equipment

Exercise machines, televisions, billiards tables, etc, may be included
depending on the arrangements made with your appraiser.

Typical Finishings

Flooring, ceiling, countertops, cabinets, appliances, baseboards and crown mouldings,
lighting fixtures, vaulted ceilings, plumbing fixtures, etc

What is not included in the appraisal inspection?

Unless otherwise stated in bylaws, personal belongings and contents are not included in the appraisal. This is the responsibility of the owner under their home insurance.

What is normac's insurance appraisal process?

Step One
Request Proposal
You can request a proposal through our REQUEST A QUOTE portal of our website, or by contacting one of our client services administrators
Step One
Step Two
Authorize Quote
Once you receive and review the quote, send back a signed copy to authorize and initiate the next steps.
Step Two
Step Three
Site Visit
Our client services team will arrange for a site inspection and send a property information collector to conduct the site inspection.
Step Three
Step Five
Review Property Details
Our appraisal team will review all the property details including the bylaws, strata plans, as well the property's regional and municipal building codes for updates.
Step Five
Step Six
Produce Report
Once all details have been reviewed, takeoffs completed and square footage confirmed, the appraisers will calculate the total replacement cost and finalize the report.
Step Six
Step Seven
Provide Updates
In years 2 and 3, our team will send you your updated valuation 60-90 days in advance of your insurance renewal date.
Step Seven
Final Step
Program Renewal
You will receive an authorization form to renew your program with your final update. Sign the authorization form and we will take care of the rest. You will receive your new insurance appraisal report 60-90 days before your insurance renewal date.
Final Step

When and How Often Should an Appraisal be done?

  1. With a new construction, a replacement cost insurance appraisal should be done by the date of first occupancy.

  2. Every year. This is why Normac offers three year programs with free updates in year two and three. Having a recent appraisal completed ensures that any fluctuations to construction costs, building codes, and bylaws have been incorporated in the TIV.

What should I do now?

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