Insurable Value Report
A company’s Fixed Asset Ledger and Real Estate Appraisals are the basis for the Insurable Value Records necessary to calculate the Replacement Cost for Real and Personal Property.
However, experience shows most companies do not have annually updated Fixed Asset Records and Real Estate Appraisals for calculating Insurable Value. We can create this for your Company.
The Importance of Insurable Value Fixed Asset Records
An accurate accounting and valuation of fixed assets is critical, because it can save your Company money. Lots of money. Few companies have the processes or resources in place to create Annual Updated Replacement Costs for Real and Personal Property.
For many reasons, including insufficient time and resources to search out all the details, fixed assets are often misidentified and misclassified, and many assets remain on a company’s books when they no longer exist. Experience indicates that from 12% to 18% of assets on the books of most companies no longer exist, and another 10% to 15% are misidentified and misclassified for the purpose of creating an Insurable Value for fixed assets. The result, companies are insuring assets that no longer exist and/or assets that should not or need be insured. An overall blended “Error Rate” of 10% to 30% is not acceptable.
How It Works
General Financial will first provide to our Clients a “No Cost” analysis of their current Insurable Value and provide the specific detail of our findings, recommendations, and our fee structure. We normally create first year Income and Cash Flow Benefits that are two to three times our costs for the service. If we do not create benefits that exceed our costs then our fees will be limited to the first year benefits. The majority of the benefits created are “Permanent” and ongoing. We are so confident in our process we will create a “contingency fee.” If no benefits are created there is no fee. Once engaged, General Financial will first perform a physical inventory of all fixed assets, and based on the findings from that inventory, we will provide the following:
- Current and accurate Real Estate Appraised Value
- Current and Accurate Fixed Asset Ledgers
- Create an Insurable Value Report
- Replacement Values for Real and Personal Property
- Annually update the Insurable Value for the Insurance Provider
- Establish an “Agreed Rate” with the Insurance Provider
General Financial is committed to working with our clients to find opportunities to increase Income and Cash Flow, reduce Insurance Premiums, and implement efficiencies. However, we also work under your direction, listen to your needs, and communicate to make sure we understand your time frames and internal constraints. The recommendations we provide significantly improve the accuracy of your records and we design a process that can be updated manually.
Benefits of General Financial’s Fixed Asset Management Process
In addition to a Current and Accurate Fixed Asset ledger and Appraisal, the following are the additional benefits derived from our process. These include:
- Increase in “Income,” “Cash Flow,” and “ROI”
- Establishment of an “Agreed Rate” with the Insurance Provider
- Eliminate disputes and litigation, if loss occurs
- Reduction in Insurance Premiums
- Create a “path forward” process that can be updated annually
In addition, for manufacturing companies, General Financial can assist in reconciling the maintenance systems, so the fixed asset ledger is continuously updated as maintenance is performed.