Brokers would like to see professional development programs deal with the thorny issue of appraising the replacement value of clients’ homes.
A proliferation of new technologies has not eliminated uncertainty around the insurance-to-value (ITV) issue.
Some brokers suggest new technologies simply add new methods to produce inconsistent results.
“You can use three different evaluators and end up with three significantly different outcomes,” said Colin Stark of John Stark and Company Ltd. “Unfortunately, that doesn’t make us look all that good.”
Stark said a professional development program that teaches brokers how to do home evaluations would be of interest, particularly if it led to a more standardized approach to evaluating the value of a home.
Jeff Sutherland of John Sutherland and Sons Ltd. agreed. “The valuations of homes are so inconsistent, it’s not funny – especially when you get above $750,000 on a home,” he said.
“We have people going out and inspecting homes and coming back with a $350,000 difference. You can’t go back to a client and say, ‘Hey, we thought it was $750,000, but it should be $1-million-and-50.’ It’s ridiculous.”
Canadian brokers have long had a conundrum with appraising the value of a home. Sometimes insurance companies will hire appraisers to assess the value of a new home, sometimes they will not. And insurers cannot always afford to keep assessing houses within a recommended period of three years.
Brokers have long argued that they are not appraisers. “Appraisers and brokers are two different lines of work,” said Jenny Burke of J.D. Smith Insurance Brokers.
But if an appraiser is not dispatched to a home to do an evaluation, the task to determine the replacement value of a home falls to the broker. A number of technologies exist to help brokers accomplish the task – Compu-Quote and iClarify among them – but the proliferation of broker tools is only leading to a proliferation of valuations, brokers say.
For example, using one model, “if you have a home built out of two different things, they tell you to pick the most expensive [material] out of the two,” Burke said. “Well that’s not accurate.”
The Insurance Brokers Association of Ontario (IBAO) recently announced it will be offering brokers instruction on how to use the latest solution for determining the insured value of homes, called iClarify. The tool has emerged as the main point-of-sale and online consumer validation and valuation solution in Canada.
“The full adoption of iClarify will allow our member brokers to change their point of sale valuation process from twenty minutes to two minutes” said IBAO CEO Randy Carroll. “iClarify drives accuracy, efficiency and an enhanced customer experience.”
