REAL ESTATE APPRAISAL FOR INSURANCE PURPOSES

Abstract

The article examines the specifics and features of real estate valuation in the context of insurance. The main attention is paid to the differences between the classic market value of the object and the insurance value. The main methods and approaches to evaluation are considered, the importance of the evaluator's professionalism in providing objective and substantiated results is emphasized. Potential complexities and controversial issues are highlighted, such as the inclusion of the value of the land plot or accounting for the natural characteristics of the plot. The importance of this topic is confirmed by the changing nature of the insurance market and the need for adequate valuation of real estate for correct and fair insurance coverage.
Special attention is paid to the assessment of the market value of the object for insurance, as it best reflects the current state of the object. The article highlights the problems in evaluating unique or expensive buildings created according to individual projects or in special places. It was determined that for industrial facilities, the calculation of the insurance amount based on the market value may be impractical.
The article defines real estate appraisal for insurance purposes as the process of determining the value of a real estate object (housing, commercial real estate, industrial facilities, etc.) at the time of concluding an insurance contract. This value is used to determine the amount of the insurance payment in the event of an insured event (for example, fire, earthquake, flood and other unforeseen situations).
The authors concluded that the valuation of real estate for insurance purposes allows the insured and the insurer to reach an agreement on the value of the object, thus ensuring transparency and fairness in the relations between the parties to the contract.
The article will be useful for insurance professionals, appraisers, and a wide range of individuals interested in understanding the appraisal process and its impact on insurance relationships.