Statement Of Values
What Does Statement Of Values Mean?
A Statement of Values (SOV) is a detailed report submitted by an insured party to an insurer, listing all insured properties along with their values and valuation methods (e.g., Actual Cash Value, Replacement Cost, or Valued Basis). This document is essential for determining insurance coverage limits and calculating premiums. For multi-location policies, insurers typically require a separate SOV for each location.
Insuranceopedia Explains Statement Of Values
Why Is a Statement of Values Important?
An SOV is crucial in commercial insurance because it provides insurers with an accurate breakdown of assets. It helps businesses:
- Assess insurance coverage and ensure that they are adequately protected.
- Determine risk exposure and manage financial planning.
- Meet tax and regulatory requirements with accurate asset reporting.
- Streamline the underwriting process to avoid underinsurance or claim disputes.
Who Uses a Statement of Values?
- Underwriters use it to set appropriate insurance premiums based on the total insurable value (TIV).
- Insurance brokers rely on it to verify that clients have sufficient coverage.
- Business owners and policyholders use it for asset valuation, risk management, and strategic planning.
What Should Be Included in an SOV?
- A comprehensive Statement of Values should include:
- A breakdown of insured assets, such as buildings, equipment, and inventory.
- The valuation method used (e.g., Actual Cash Value or Replacement Cost).
- A location-specific report for multi-location policies.
- All insurable property details, including machinery and high-value items.
To avoid discrepancies, policyholders should ensure accuracy when drafting an SOV. Many insurers offer templates, and working with a property insurance broker can help streamline the process. Once finalized, the total insured value (TIV) is established.
Conclusion
A Statement of Values (SOV) is a vital tool for businesses, underwriters, and brokers. It ensures proper insurance coverage, helps prevent underinsurance, and supports financial planning. Whether for commercial properties or high-value personal assets, maintaining an accurate SOV can safeguard policyholders from unexpected financial losses.
