Underwriting Agencies of Australia’s approach to claims valuations ensures that both brokers and clients can get the best possible outcome out of every case. Here’s why.
Underwriting Agencies of Australia’s (UAA) claims valuation process has been refined over multiple years, using a variety of external valuers to determine market values for individual claims.
Michelle Morrissey, National Claims Manager, Australia – UAA sheds some light on the process.
“Once we’ve determined that a unit is a total loss and it can’t be repaired, UAA via its assessors, will actually engage with the valuer and directly provide all of the information around the item itself, any accessories that are insured with it, the kilometres, or hours and the condition of it,” she says.
“The independent valuer will take a look at the item using their own methodologies and skill set to determine what they believe is a fair market value for the item.”
UAA utilises key valuers as part of its service who value anything from motor vehicles, light and heavy machinery to mobile and tower cranes. Each valuer is appointed based on their core skillsets and the item requiring valuation.
Each of these valuers are independent and accredited specialists, ensuring that they can provide accurate and impartial assessments.
Valuers are independent and accredited specialists, ensuring that they can provide accurate and impartial valuations.
Each of these valuations are also able to be conducted online, and where beneficial, in person. To increase the efficiency of each claim, UAA has developed its asset specific forms that help to provide a comprehensive outlook for the valuer.
Valuers review the data provided, which can incorporate aspects such as assessment reports, purchase invoices, maintenance records, pre-start checks and more.
Each of these sources helps to paint a more accurate picture around the age, hour, mechanical condition and pre-incident condition of the damaged unit.
Valuers will also contact the assessor and the insured to request any missing details and obtain their opinion on the condition of these assets.
Each of these factors affect and help to determine the overall value of the unit.
Disputes are minimised by offering an additional 15 per cent loading if market value is less than 85 per cent of the sum insured. UAA also offers an agreed value option subject to a valuation from its certified valuers.
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UAA promotes the use of three valuation approaches, helping to cater for different circumstances and machinery types.
The ‘market approach’ is suited for classes of plant and equipment that are homogenous, such as motor vehicles and certain types of equipment or machinery.
The ‘income approach’ can be used where specific cashflows can be identified for the asset or a group of complementary assets, while the ‘cost approach’ is commonly adopted for plant and equipment, particularly in the case of individual assets that are specialised or special-use facilities.
The client’s role
Clients can also aid their own claims valuations processes by taking precautionary steps and keeping up to date with the current landscape for machinery and coverages.
“It’s about being in tune with the market and no one’s better than the insured in certain cases to be involved in that process. Even if you use online resources, it can at least give you a base idea of what the valuation of that item should be. If you’re doing that on a yearly basis, you’ve got a greater chance of getting the accurate value, rather than just leaving it and rolling it over every five years for example,” Morrissey says.
“It’s important to really be in tune with the market values of the machines. If they’re over insured at the time of the loss, our clients are paying a premium on a larger amount. Sometimes these could actually be significantly less depending on the economic state than what they were expecting.
Morrissey adds that UAA is more than happy to have discussions around the process and the valuation itself.
“We’re more than open to the conversation as well. We come at the valuations from a very open mind. We understand that clients want to get the highest possible valuation out of their own assets,” she says.
“If one of the parties doesn’t feel as though the valuation accurately reflects the state of the asset, we’re open to that conversation. They can provide some examples of other valuations and we’re happy to provide advice around if that case is comparable.
“Based on what the insured advises, it sometimes can change the perception of the value. From our end we provide as much detail as possible as to why a case may not be comparable. That’s where that open dialogue plays such a big part.”
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