I'm finding many apartment owners/managers insuring their complexes uniformly at $55/ Net SF, which is equivalent to ~$40/Gross SF: Standard 2-3 story wood frame apartments, 10-20 units per building, 200-250 units per complex.
The reconstruction models are +$85/Gross SF.
One of the issues is that under new construction the owners act as their own GC and build in bulk the entire complex, but in claims scenario they lose economies of scale and may or may not want to act as the GC. Even for new constructon, I'm not sure $40/SF is reasonable or how the figure of $55/Net SF got to be so popular.
In the soft market, many underwriters didn't bother checking, or at least not arguing about ITV.
With the market hardening, this is changing and it's a challenge to get the insured and the insurer to agree, and I much prefer a rational estimate to a haggled estimate.
I'm assuming the $40/SF is low, but are the ITV models too high, about right, or still not high enough? For purposes of discussion, assume single building fire rather than hurricane so the numbers aren't skewed by post-cat inflation.
If I take it to the step and engage a loss adjuster to write-up a detailed loss estimate as if a sample building burned down, any thoughts on the ballpark cost of the write-up? The biggest sample building would likely be 24 unit, 2-3 story, 26,000 SF.
Thanks.
John Nixon