Building Replacement Cost Value: Difference between revisions
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=== | === Summary === | ||
* The '''Building Replacement Cost Value (BRCV)''' is the cost to replace a building or unit, including the foundation, using the same type of material and construction, without factoring in depreciation. | * The '''Building Replacement Cost Value (BRCV)''' is the cost to replace a building or unit, including the foundation, using the same type of material and construction, without factoring in depreciation. | ||
* The BRCV is used as a rating factor for determining flood insurance premiums but does not impact the replacement cost determined at the time of loss. | * The BRCV is used as a rating factor for determining flood insurance premiums but does not impact the replacement cost determined at the time of loss. | ||
== How BRCV is Determined == | |||
# '''FEMA Determination''': | # '''FEMA Determination''': | ||
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#* For other occupancies (e.g., residential condominiums), FEMA does not determine the BRCV. The insurer is responsible for determining, documenting, and maintaining the BRCV in the underwriting file. | #* For other occupancies (e.g., residential condominiums), FEMA does not determine the BRCV. The insurer is responsible for determining, documenting, and maintaining the BRCV in the underwriting file. | ||
== Documentation Requirements == | |||
* Supporting documentation must include: | * Supporting documentation must include: | ||
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** Buildings or units with less than 1,000 square feet. | ** Buildings or units with less than 1,000 square feet. | ||
== Impact on Premiums == | |||
* The ratio of building coverage selected to the BRCV affects the premium. | * The ratio of building coverage selected to the BRCV affects the premium. | ||
* If a policyholder selects coverage above the BRCV, the higher coverage amount is used to calculate premiums. | * If a policyholder selects coverage above the BRCV, the higher coverage amount is used to calculate premiums. | ||
* Accurate BRCV ensures appropriate premiums and policyholder coverage alignment. | * Accurate BRCV ensures appropriate premiums and policyholder coverage alignment. | ||
Revision as of 16:05, 21 November 2024
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This page is a placeholder. More information will be added soon. |
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This Equinox Procedure is for Agents. Find a complete list here. |
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This page contains details about NFIP New Business. |
Summary
- The Building Replacement Cost Value (BRCV) is the cost to replace a building or unit, including the foundation, using the same type of material and construction, without factoring in depreciation.
- The BRCV is used as a rating factor for determining flood insurance premiums but does not impact the replacement cost determined at the time of loss.
How BRCV is Determined
- FEMA Determination:
- For some occupancies (e.g., single-family homes), FEMA calculates the BRCV using application data and property-specific industry data.
- If FEMA cannot determine the BRCV, the insurer must obtain it using common industry appraisal methods and report it on the application form.
- Insurer Responsibility:
- For other occupancies (e.g., residential condominiums), FEMA does not determine the BRCV. The insurer is responsible for determining, documenting, and maintaining the BRCV in the underwriting file.
Documentation Requirements
- Supporting documentation must include:
- Recent appraisals of the building and foundation based on replacement cost.
- Records must be validated and updated at least every three years.
- Documentation is not required for:
- Non-residential manufactured/mobile buildings.
- Storage/tool sheds or detached garages.
- Buildings or units with less than 1,000 square feet.
Impact on Premiums
- The ratio of building coverage selected to the BRCV affects the premium.
- If a policyholder selects coverage above the BRCV, the higher coverage amount is used to calculate premiums.
- Accurate BRCV ensures appropriate premiums and policyholder coverage alignment.