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Total Component Estimating

The total-component method is based on the concept that a building’s unique features most accurately determine actual reconstruction costs. Since its introduction, the majority of property insurers have adopted component estimating and its impact has been measured by years of data collection, analysis and real-world results.

• In 1999, the use of square-foot and unit-cost estimating systems left 73% of properties in the United States undervalued by an average of 35%.
• Today, ITV has improved substantially. MSB’s ITV Quality Index for 2007 indicates an estimated 66% of properties are undervalued by 18%.

These decreases mean carriers have effectively recovered at least $8 billion in previously “lost” premium on an annual basis. Accurate ITV has also resulted in better insurance protection for consumers and businesses, fewer regulatory complaints and better relationships among insurers, agents and customers. 

All approaches to component estimating are not equal. MSB’s total-component methodology accommodates:

• The unique characteristics of individual buildings, inside and out, provided by the people who have the best, first-hand knowledge of properties—the owners themselves.
• Mixed construction.
• An expansive library of enhancements and features for both “main street” and “high value” homes.
• GIS (geographic information systems) technology and localization of construction costs based on unique construction segments, not just 3- or 5- digit ZIP or postal codes.
• A continuous assessment of changes ongoing in the construction market.
• Consideration of “soft costs” and price surges.

MSB’s residential and commercial valuation solutions are designed to simplify collection of the component-level building detail needed for consistent, defensible residential, commercial and agricultural valuations. MSB’s solutions are available on a number of delivery platforms. This allows for flexibility in incorporating them into both point-of-sale systems and back-office workflows. MSB’s batch processing and book-of-business management services also allow you to perform risk-specific reassessments of part or all of a book of business. MSB also uses total-component data in the IntegriClaim property claims estimating.