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Components of the Gallagher Bassett Insurance Appraisal The components that make up Gallagher Bassett ' s insurance appraisal include the following cost-driving elements . • Building Component Costs Materials , including bricks , mortar, labor hours and other basic costs are combined into unit- in - place costs (the cost for one square foot of an entire wall including bricks , sheathing , studs , etc . ) and component- in - place costs (the costs of building an entire structure) . The smallest elements in a building are calculated together for use in replacement cost estimating . Material costs are obtained through building trade councils and local suppliers . Cost for these items include state and local taxes , freight charges and contractor discounts . • Labor Costs Labor Costs from nineteen different construction trades are researched . This information is obtained from building trade councils , associated general contractor organizations , local unions and contractors , and state and local government agencies . • Time Location Multipliers Time Location Multipliers are used in Gallagher Bassett ' s cost database to adjust building base costs to current local costs . These multipliers are researched continuously and updated monthly . To produce time location multipliers , specific element costs are compiled into weighting schedules that specify the percentage of each trade and building material cost in relation to the total base building cost . These values are geographically specific and reflective of the date the appraisal was completed . • Soft Costs Overhead and profit are built into every contractor' s bid . The allowance included in the commercial base cost for normal general contractor and subcontractor profit combined is 20 percent . • Architectural Fees An architect designs structures utilizing technical and aesthetic abilities . A national average for these services is 7 percent . • Contingencies A contingency is a dollar amount added to the final bid price of a construction project to cover unknown factors . This amount can range from 0- 15 percent . Gallagher Bassett ' s database uses a 5 percent variation . Insurance Exclusions You may find that in your appraisal report , there are certain items that have not been given a specific value . This is because in many insurance policies , there may be certain items of property that are either not insured , or specifically excluded from coverage depending on the particular items of the insurance policy . The most common exclusions include : • Basement excavations ; • Below-grade foundations ; • Underground plumbing and piping ; and • Conduits CATASTROPHIC OCCURRENCES In the event of a catastrophic loss or multiple catastrophic loss occurrences including , but not limited to tornado , hurricane , earthquake losses , or other disaster, the actual cost of replacement may greatly exceed the appraised values due to temporary distortions in the marketplace because of shortages of labor and material . Gallagher Bassett Appraisal Services will not be responsible for any disparity in any such event . appraisals/daVdV