So…what is a statement of values used for in Canada?
Q&A. Here’s a common question we’re often are asked is what is a statement of values and what it used used for? The simple answer is that a statement of values lists all all asset values to be insured on a location by location basis.
It should be noted that a statement of values is also commonly referred to in the industry as an SOV. However, it can be more than that and what a statement of values is actually used for depends on what role you play in the insurance buying process. Read on to learn more about how a statement of values is used in Canada…
Ok. So what is a statement of values used for in the Canadian insurance buying process?
A statement of values or SOV is a great tool for the insured, insurance broker and insurance company underwriter working on an account to help keep track of the insurable assets by location, the method of valuation used and the categorization of those assets.
Completing and maintaining an accurate statement of values benefits all as the more detailed information insureds provide the better insurance brokers and insurance company underwriters understand and can understand and price the risk.
An example is that an insured may just state they need $750,000 in property insurance. However, what an insurance broker and insurance underwriter want and need to know is what is the breakdown of assets. In this example, the insured may actually have $500,000 in leasehold improvements, $200,000 or inventory and $40,000 or equipment and $10,000 of computer equipment. Each of these might have different rates.
What else a statement of values can do for your business…
In addition, a statement of values is used to calculate an insured’s total insurable value. This value is more commonly know as TIV and is the statement of values total multiplied by the rate which equals the insurance property premium.
Your ALIGNED broker can help you determine how to use a statement of values when you are insuring your commercial business.