It is amazing that if you pick a homeowners account and run the valuation #s for that one risk for 4 of your companies (that use the same valuation program), you will find yourself with 4 different numbers. It appears that this is because of some “behind the scenes” factors that those carriers build into the calculation. Many agents have commented that the differences can be as much as 25%, So which one is right? That is a question that is difficult, if not seemingly impossible to answer.
Probably the more appropriate question is which valuation # do you go with? If you think about the purpose of performing the valuation, one of the objectives is to arrive at a number that in the event of a total loss, the company will agree to pay that number. For this reason, the logical approach is to go with the valuation number determined by the company you will be writing the risk with. If the valuation “estimator” for that company came up at $280,000, then the $280,000 number should be the number you go with. To use another company’s “estimator” number could certainly result in your customer not receiving the proper settlement at the time of a major loss. After all, if the company you are binding the risk with determined the proper valuation, they certainly should not be in a position to dispute it.
This assumes obviously that the proper “inputs” were used. That is a topic for another day.