Developed with Xactware Data and Technology. April Best Practices

Transcription

1 Developed with Xactware Data and Technology April 2015

2 Contents Introduction... 2 Training... 2 Real Time Training... 2 Market Value vs. Replacement Cost Value... 2 Accurate Property Information... 3 Required Questions... 3 Explicit Answer Shading... 3 Quality Wizard... 3 Property Prefill / Original Prefill Column... 3 iscore Input Score... 4 Quality Grade... 4 Quality Wizard... 4 Homeowner Involvement... 4 Renewals

3 Introduction Introduction The 360Value team has identified key best practices for effective and efficient use of 360Value valuation products. Adhering to these simple best practices helps produce optimum replacement cost value results. These best practices include, but are not limited to: user training, accurate property characteristics, proper quality selection (if shown), homeowner involvement, understanding market value versus replacement cost, and recalculation of valuations at renewal. Training 360Value is easy to use. Most users can create valuations with little or no formal training. It is important, however, to enter as much information about the property as possible for optimum results. Features such as required questions and iscore can help increase user input and answer verification. Real Time Training 360Value includes comprehensive on-line Real Time Training. This feature includes one-click help links for answering valuation questions as well as definitions for each option provided. The Real Time Training feature also includes research white papers and additional information regarding the replacement cost value. These items include: pricing research, comparison to market value, and iscore. Market Value vs. Replacement Cost Value It is important that users understand the difference between the Market Value and the Replacement Cost when considering valuation results. The Replacement Cost is the amount it will cost to replace or repair the home with like, kind and quality materials should it be damaged or destroyed. Market Value is the approximate selling price or value of the home (including land) in the current real estate market. Key considerations include: The Market Value for a home generally includes the value of the land on which the home sits. The Replacement Cost of a home does not include any land values; it estimates the cost to rebuild only the home not land, not other structures, nor landscaping or other improvements. The Market Value for a home is affected by changes in the real estate market. When homes in a particular area are in high demand, the Market Value for homes in the area will generally go up. In the same way, when demand for homes in a particular area is low, the Market Value of homes in that area may remain level or even go down. Replacement Cost is not affected by the real estate market. It is instead affected by the fluctuations in material and labor costs to build a home. For example, if the cost of material such as lumber, concrete, drywall, and carpet are higher in a particular area, then the Replacement Cost of a home in that area will be higher than the Replacement Cost of the same home in an area where materials are less expensive. 2

4 Accurate Property Information The Market Value of a new home generally factors in the costs required to build the home new. Replacement Cost, however, looks at the cost to re-build the home, if it were completely destroyed, using all of the same materials and construction techniques originally used to build the home. The cost to build a new home can be quite different from the cost to re-build a pre-existing home due to access issues, labor efficiencies, economies of scale, and higher price of materials that may no longer be in common use (such as lath and plaster vs. drywall). Accurate Property Information A reliable property valuation is dependent upon accurate property information. While regional prefill, and Property Prefill data (when licensed) can speed the data input process, all prefill answers should be reviewed, confirmed and/or modified as appropriate. 360Value includes several features to encourage accurate user input, including required questions, explicit answer shading, the Quality Wizard, Property Prefill data, the Original Prefill display column, and iscore. Required Questions Required questions in 360Value are marked by an asterisk and must be answered explicitly by the user. While 360Value is configurable, and questions can be marked as required or optional to meet specific client requirements, 360Value has identified several questions that impact valuation reliability more than others. These include but are not limited to: Year Built, Total Finished Square Feet, Quality Grade, Number of Stories, Foundation Type, Percent of Lowest Level that is Finished, Exterior Wall Finish, Garage/Carport, and Fireplaces. Questions can be set as required, to display the prefill value, or to hide the prefill value. If a required question is not explicitly answered, a message will display when the user tries to calculate. The user can then click the message link to be directed back to the unanswered question. Explicit Answer Shading Explicit user entered details, based on known building characteristics, are critical to the valuation process. Data fields answered explicitly by the user are shaded to differentiate them from unconfirmed prefill data (not shaded). Quality Wizard The Quality Wizard asks users specific questions about building details. It uses the answers provided to prefill a Quality Grade for the home. The answers provided in the Quality Wizard also help to determine appropriate Regional Prefill values for other fields. Property Prefill / Original Prefill Column Residential public record property information provided by Property Prefill helps users by providing up to 21 property-specific building characteristics (such as Total Finished Square Feet, Year Built, and more) that might otherwise be difficult to accurately identify. Users can confirm Property Prefill data with the homeowner and can initiate questions about the home that might not otherwise be asked. 3

5 Quality Grade Users can quickly confirm answers by clicking the appropriate icon. Confirmed answers are marked explicit and increase the iscore (Input Score). The original prefill of a changed answer displays in the Original Prefill column for reference. All three features (PushPin, Original Prefill Column, and iscore) are available individually or jointly as requested by the client. iscore Input Score The Input Score, or "iscore," monitors the amount of reliable data input into the valuation. The iscore increases when questions are answered or prefilled information is confirmed. Users can confirm prefilled answers by clicking the square icon or modify prefill values by entering correct responses. Quality Grade Because 360Value prices individual components used in the building s construction, correctly specifying the Quality Grade of those components significantly impacts the replacement cost total. For Residential valuations, 360Value prefills an initial Quality Grade based on the geographic location of the home. Because homes in an area vary, users should thoroughly review the initial Quality Grade offered. Users can select an alternate Quality Grade, or can use the Quality Wizard to refine the Quality Grade. In addition to overall home quality, quality levels for individual rooms may vary widely in the home. Users may upgrade or downgrade individual room quality using the Room Quality Adjustment feature. Some users may not be as familiar with quality terminology or have the experience needed to identify the appropriate quality of a home. In this case, the quality questions can be hidden, prompting the system to select the appropriate Quality Grade based on the geographic location and the explicitly answered questions in the valuation. Quality Wizard As noted above, the Quality Wizard asks specific questions about building details and uses the answers to prefill Quality Grade. The answers provided in the Quality Wizard are also used in the valuation to help determine Regional Prefill values for other questions. Homeowner Involvement No one knows the home better than the homeowner, so it makes sense to involve the homeowner in the replacement cost process. Discussion about the home s characteristics and features is critical when determining the replacement cost value. 360Value s Collaboration feature enables the user to send an to the property owner with a link to their valuation. The property owner can review the building characteristics, accept or edit the valuation, and collaborate with the user on home details. 4

6 Renewals Renewals The 360Value team recommends recalculation of valuations at renewal. This ensures each valuation is properly re-priced at the component level and is more specific than traditional price index methods. Valuations are easily recalculated at renewal time for the most up-to-date replacement cost value. Users can recalculate valuations with one-click on the Results page or an electronic process can be setup to handle batches of renewal recalculations. Insurance Services Office, Inc., ISO, the ISO logo, and 360Value are registered trademarks and Verisk, Verisk Insurance Solutions, and the Verisk Insurance Solutions logo are trademarks of Insurance Services Office, Inc. AIR Worldwide and the AIR Worldwide logo are registered trademarks of AIR Worldwide Corporation. Xactware is a registered trademark of Xactware Solutions, Inc. All other product or corporate names are trademarks or registered trademarks of their respective companies. U003 (3/14) z