Equipment appraisals for insurance claims come in two categories: the equipment owner may need an equipment appraisal to engage with the insurance company, or an insurance company may request an equipment appraisal for fulfilling a filed claim. In both of these cases, standard operating procedure is to call the equipment appraiser after the damage has been done.
I’ve handled several cases, of both kinds, over the years, and cannot advise strongly enough the importance–especially to the owner–of having an equipment appraisal done while the equipment is in good working order. Once an over-the-road truck, milling machine, tractor or heavy equipment has been totaled by collision, fire or vandalism, or your manufacturing line for steel working, furniture making, food processing or textile processing has been damaged by fire, earthquake, landslide, flood or other unavoidable catastrophe, appraising its original value becomes–as you might imagine–a little more difficult.
Imagine how much quicker & less expensive an equipment appraisal for insurance claim reasons might be if the files on the equipment included a relatively recent qualified, USPAP equipment appraisal. Even if the equipment has not been appraised within the last few years, an equipment appraiser could refer back to the original appraisal done for insurance purposes to ensure that all the manufacturing, construction, agricultural, mining & aggregate, transportation equipment are adequately covered in case of loss or damage.
You do have that original equipment appraisal, right?
If there’s not an equipment appraisal to support your insurance coverage, can you be sure you’re adequately covered for loss of damage? Do yourself a favor and be sure your coverage is at least sufficient to replace your equipment at its current level. Be aware of any specific coverage language in your policy that may effect the premise of value and share that with your equipment appraiser. Your equipment appraisers will generally assume Fair Market Value (FMV); your insurance agent will refer to it as Actual Cash Value (ACV). You’ll call it “staying in business.”
Jack Young
Equipment Appraiser for Insurance Purposes
NorCal Valuation
