Commercial Replacement Cost Valuation Requirements

Attention Agents: The replacement cost value (RCV) of a commercial building must be determined using accurate, complete, and current information about the property being insured. At a minimum, the calculation must reflect the building’s size, construction type, age, occupancy, construction materials, and any other characteristics that materially affect the cost to repair or rebuild the structure.

The RCV produced by this calculation must be used consistently throughout the underwriting and rating process, including when determining the applicable premium. For consistency, agents are requested to utilize TWIA’s Commercial Replacement Cost Valuation Tool when determining a property’s replacement cost value. Questions regarding the valuation process or the appropriate replacement cost determination should be directed to Underwriting.

These requirements apply regardless of whether the available coverage limit is restricted by statute, policy provisions, underwriting guidelines, or other limitations. Such limitations do not alter the requirement to calculate and use the property’s properly determined replacement cost value for underwriting and rating purposes.

If you have any questions, please contact us.