Case Study – Wood Products Manufacturer
The owner of this large wood products manufacturing operation was concerned about how much it would cost him to rebuild his facility in the event of a catastrophic event. We engaged a certified insurance appraiser to evaluate the facility and determine the full replacement cost. Because of the appraisal, the underwriter included the Agreed Value endorsement on the property policy and suspended the coinsurance clause.
The operation later suffered a significant fire loss of about $19,500,000 to its warehouse and sorting operation. Because a current insurance appraisal was on file with the underwriter and the policy contained the Agreed Value endorsement, we were able to reach a favorable settlement with the insurance company and close the claim in only 180 days from the date of loss.
time to settle and close claim
Potential Coinsurance penalty averted
- Property Valuation: Inspection raised questions on the full replacement cost of the manufacturing facility.
- Coinsurance Clause: Property policy contained a coinsurance clause that could result in a significant penalty in the event of a property claim.
- Rolling Equipment: Many pieces of rolling equipment were not covered in the program.
- Increased Property Valuation: Property values were amended to provide full replacement cost based on the certified insurance appraisal.
- Agreed Value Endorsement: Due to the certified insurance appraisal, underwriter included coverage endorsement thereby suspending coinsurance clause and potential penalty.
- Claim Adjuster: Settled and closed a $19,500,000 fire loss in 180 days.