By Mark Galante, PURE Insurance

Whenever a natural catastrophe occurs, the issue of underinsurance is illuminated in the mainstream press. Once again, everyone is reminded of the crippling financial effect that being underinsured can have, not only on a household, but on a community. Avoiding underinsurance requires the right coverage combined with the right limits. In exchange for providing generous coverage like guaranteed replacement cost, specialist insurers invest heavily on appraisal services to determine the appropriate coverage limit: insurance to value. Those of us who  live in this niche know that determining the right limit is hard, and that the process can create great policyholder frustration, even distrust. Nonetheless, the process is critically important. Embracing the following principles allows carriers to manage valuations prudently, collect the appropriate premiums for the risks assumed, and delight their policyholders in the process.

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