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HomeMy WebLinkAbout2005-232 Gallagher Bassett Services , Inc . 15 May 16 , 2005 , Ms . Rozell Schnur Account Manager Arthur J . Gallagher & Co . - Orlando a Division of Arthur J . Gallagher & Co . ( Florida ) 7380 Sand Lake Road , Suite 390 Orlando , FL 32819 RE : Insurance Appraisal Program for Indian River County BOCC , Vero Beach , FL Dear Ms . Schnur : We appreciate the opportunity to submit our recommendations and proposal for valuation service relative to the approximately 97 buildings ( after eliminating lift stations ) listed on the Indian River County BOCC property schedule . The study we propose will reflect our opinion of the Replacement Cost , new and Insurable Replacement Value of buildings and building appurtenances . The purpose of our study is to provide current and supportable data for insurance placement and proof-of- loss and will include the following services : 1 . The preparation of a detailed record of your structures to support total as well as partial losses . 2 . The rendering of all necessary price research to establish the Insurable Replacement Value of your structures . 3 . The preparation of a report , properly classified , indicating value conclusions in total , by classifications and by property unit or item . 4 . The implementation of an Annual Update Service Program to update values systematically and economically . 5 . The establishment of a Loss Assistance Program in support of your interest in the event of a loss . As is customary , antiques , works of art , land , licensed vehicles , stock and supplies and the personal property of others will be excluded from the appraisal . THE GALLAGHER CENTRE TWO PIERCE PLACE ITASCA, IL 60143 630-773-3800 630-285-4000 FAX www.gallagherbassett.com appraisals/dat/dt/ APPRAISAL PROGRAM STRUCTURES Gallagher Bassett Services , Inc . is fully staffed and equipped to provide an authoritative , thorough examination and record . Our qualified and experienced appraisers will list each structure as stated in the Terms and Conditions below . We use the most advanced computer data bank for valuation of Insurable Replacement Value . This will give you a factual Appraisal Program for structures . The conclusions of this insurance appraisal are for the purpose of the placement of insurance only and are not suited for any other purpose . We will certify that we have made a personal inspection of the property that is the subject of the reports to be issued as a result of this contract . Your report will be prepared in conformity with the Uniform Standards of Professional Appraisal Practice . All conclusions , opinions and analyses are unbiased . We have no present or prospective interest in any property that is the subject of this report . Our compensation is not contingent upon any action or event resulting from the analyses , opinions or conclusions reported herein or from the use of this report . We have not examined and do not pass judgment upon the title to , or liabilities against , any of the appraised property . STRUCTURES The recommended method of appraisal for your structures is the Detailed Appraisal, which includes a determination of Insurable Replacement Value based on the on -site survey and the valuation of each of the major components as follows : Occupancy Code Heating , Cooling & Ventilation Class of Building Electrical Cost of Rank Exterior Walls Total Floor Area Exterior Stairs Number of Stories Fire Escapes Story Height Wall Ornamentation Foundation Roof Cover Frame Basement Construction Floor Structure Elevators & Conveyances Floor Cover Sprinklers & Alarms Ceiling Cover Current Replacement Value Interior Partitions Insurance Exclusions Plumbing Extraordinary Building Components Year Built (Where Possible ) CODES Marshall & Swift/Boeckh recognizes the three national building codes : Building Officials and Code Administrators ( BOCA) , Uniform Building Code ( UBC ) , and Standard Building Code ( SBC ) . The requirements of each of these codes have been considered in our costs . National codes change periodically ; Marshall & Swift/ Boeckh reviews these changes , and when necessary , adjusts commercial models to reflect the changes . The Marshall & Swift/Boeckh commercial models do meet all three of the national codes , but do not reflect any additional codes imposed by state of local municipalities . Most state and local governments have adopted one of these codes as a standard , or enhanced them to reflect local concerns . appraisals/daUdU Our report package will include the following : 1 . Certificate of Replacement Cost , new , and Insurable Replacement Value by structure . 2 . Computer-generated AutoCAD plot plans/diagrams on all structures appraised ( i . e . , not for update additions ) , identifying each structure by name , addres , etc .. Photographs will also be included . 3 . Summary of values by structure will include : ! Location Number ! Structure/Building Class ! Structure/Building Number ! Occupancy Code ! Structure/Building Address ! Replacement Cost ! Name of Structure/Building Insurable Replacement Value VALUING FOR INSURANCE PURPOSES Building Insurable Replacement Value is based on cost formulas derived from analysis of actual construction costs using local labor rates , material pricing , manufactured equipment and contractors overhead and profit . It is based on replacing each building as a complete unit at one time . Consideration has not been given to labor bonuses , material premium costs , additional costs to comply with building codes , ordinances or other legal restrictions . Neither is consideration given to demolition costs in connection with reconstruction or removal of destroyed property . The value of land and site improvements have not been included . Building Insurable Replacement Value is the replacement value less any noninsurable items . ANNUAL UPDATE SERVICE PROGRAM - SUMMARY FORMAT We recommend our Annual Update Service Program to provide subsequent upkeep of insurable values . At intervals of twelve months , we will determine the current Insurable Replacement Value of structures . The values presented in our report will reflect our analysis and consideration of: 1 . Structure details as recorded in our initial appraisal report . 2 . Your reports of additions , deletions , and transfers of structures subsequent to the date of our initial appraisal report . 3 . Adjustment of Insurable Replacement Value based upon our research concerning current labor rates and commodity prices affecting your structures . appraisals/daUdU Our Annual Update Service Program will be invoiced starting one year after the initial appraisal and will continue for a term of five years in total . During the term of this contract , we reserve the right to adjust our fee at annual intervals based upon services rendered or costs incurred . Any fee increase instituted will not exceed the prior year's Annual Update Service Program fee by more than 10 percent under any circumstances for the same items in the initial appraisal . New items will be reviewed by Gallagher Bassett and a decision will be made regarding whether any additional fee will be charged . In the event of loss , while this agreement is in force , we will compile current insurance values and advise in the scheduling of the proof-of- loss statement . This service will be provided without charge except for the reimbursement of the travel and out- of- pocket expenses incurred by our personnel . We recommend that insurance coverage be promptly reviewed upon receipt of each of our appraisals and Annual Update Service Reports so that proper coverage can be maintained at all times . UNDERSTANDING YOUR INSURANCE APPRAISAL What is an Insurance Appraisal? An insurance appraisal is a tool to help businesses meet the challenge of protecting assets by establishing the proper level of coverage on insurable values . The goal of the appraisal is to give businesses a tangible record of up-to -date values on insurable items . This record of values can provide proof of loss assistance in the event that the insured items are lost or damaged due to unexpected occurrences such as theft , vandalism , catastrophic events or any other type of loss . This engagement is being undertaken to develop insurable values . As a result , its conclusions should not be used for any other purpose . Your Gallagher Bassett Insurance Appraisal An appraisal conducted by Gallagher Bassett provides clients with replacement cost and insurable values on insured items , specifically buildings and structures . Insurable values are based upon Replacement Cost Value . Replacement Cost is defined as , the cost to construct or replace , at one time , an entire building of equal quality and utility . Modern materials along with current methods , designs and layouts are used for replacement . Replacement Cost should not be confused with Reproduction Cost , which is defined as the cost to reproduce the subject building with an exact replica . The Insurance Appraisal Report for Structures from Gallagher Bassett includes the following information : • A component by component breakdown of replacement cost for facility buildings ; • Total structure replacement cost ; • Cost per square foot replacement values ; • Photographs of the appraised buildings ; and • Computer Assisted Drawings ( CAD ) of each structure . appraisals/daUdU 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 TERMS AND CONDITIONS OF APPRAISAL PROGRAM For services outlined above and based upon our understanding of the approximately 97 structures (after eliminating lift stations and zero value ) listed on the Indian River County BOCC property schedule to be appraised , we quote the following fee structure : 1 ) $255 . 00 per building for the approximately 73 buildings valued greater than $ 50 , 000 . 00 . 2 ) $230 . 00 per building for the approximately 24 buildings valued less than $ 50 , 000 . 00 . In an effort to expedite this project there will be additional charge of $ 600 . 00 based on the above building count . This additional charge will be paid by Arthur J . Gallagher & Co . ( Florida ) . This amount is due upon completion and submission of documents . The annual update service will be billed at the initial annual rate of $ 1 , 000 . 00 and is due upon submission of the annual report . Any structure (s ) not specifically identified in this proposal can be appraised upon request for the same per building fee . We will prepare three copies of the report , two for the client and one for the broker . The terms of this proposal will be in effect for a period of ninety days from its date . To complete our files and proceed with the services described , please sign and return a copy of this proposal to us . We appreciate your implied confidence and the careful consideration you are giving to this proposal . We assure you that the work to be undertaken will have careful and continued attention . Cordially , GALLAGHER BASSETT SERVICES , INC . David P . Thorpe J seph . Slifka Assistant Vice President xecutive Vice Pr ident ACCEPTED : Bo r, of County Commissioners Indian River County , Florida By : S� Thomas , $., Lowtherc .Gh;airman , Y jj�� rq-y � � July 12 iQ [Jryi • + � . . . ee . e • `}, ' • BCC Acced ; v •'••"%�� ATTE T. `. f reyR0 , rk By: J L •' Deputy Cie rk'41 Ae * * * * goes " . 9 , a ` " SF1P : tltt .. Approved as to form and legal Sufficiency : By : &ttzO William G . Collins II County Attorney appraisals/dat/dV