It is hurricane season, and there is no better time for ourindustry to rededicate itself to the basic underwriting principleof Insurance to Value.
Lessons learned from past catastrophes show that foregoing ITVhomework can be very risky business. The task is all the moredifficult in a troubled real estate market amid hotly competitiveinsurance conditions, yet it's a must.
First, a quick refresher on what ITV is, and is not. ITV is theratio of the amount of insurance to the value of the insuredproperty risk. It is not to be confused with the insurance limit,which is the amount of insurance the underwriter contractuallyagrees to provide in the event of a covered loss. Values and limitsare different concepts, with different purposes (althoughinterrelated) in property underwriting.
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