The Role of Valuation in Property Insurance

ESV Ene Edward,

The only way a property can be professionally insured is to know its current market value. Thus, the role of valuation in all forms of property insurance cannot be overemphasized. By default, residential, commercial, and industrial properties ought to be evaluated by a professional estate surveying firm and insured by a professional and licensed insurance company. It is vital for properties to have adequate and up-to-date insurance coverage. With this, the market value is not only retained, but the property is protected in the event of a disaster, and the insurance coverage matches what is needed. Property insurance valuation is professionally carried out by a professional estate surveying and valuation firm with the sole aim of ascertaining the current market value of the property for insurance purposes.

For insurance companies to carry out the business of property insurance, a valuation report must be a guiding compass in their decision-making processes. I make bold to state here that any property insurance carried out without a valuation report from a professional firm of estate surveyors and valuers is far from reporting and insuring reality. On this premise, there is a need for estate surveyors and valuers and the insurance companies to form synergy that will mutually serve the interests of both professions for their common good and the collective gain of the stakeholders.

In carrying out insurance valuation, standards must be maintained in line with international best practices. This is why the nature and location of the property to be insured must be evaluated based on the method of valuation that suits the property.

In the most advanced economies in the world, there are government policies put in place to regulate the business of property insurance. The aim of this is to ensure seamless transactions between different professionals involved in property valuation and insurance. In the Nigerian business environment, there is a need for such regulatory policies to be in place, and the roles of estate surveyors and valuers in property insurance are clearly defined.

ESV Ene Edward Edet, a registered estate surveyor and valuer, is the principal partner of Ene Associates (Estate Surveyors & Valuers). He wrote from Uyo, Akwa-Ibom State.