Is Sketching Necessary in the Underwriting Process for Property and Casualty Insurance?

Is Sketching Necessary in the Underwriting Process for Property and Casualty Insurance?

Jun 1, 2020

Structural diagrams can depict essential information needed during the underwriting process such as building shape and square footage. Sketching has been a traditional element underwriters take into consideration; however, the property insurance industry is trending that these drawings may not be as useful during the data-gathering procedures to decide whether to underwrite a policy.

More Than a Basic Footprint is Needed

One of the reasons sketching isn’t as prevalent is because it doesn’t show a lot of the needed information. Underwriters want to handle assessments accurately, taking a lot of details into account. These include considering the shape, story height, roof style, and lot slope when calculating replacement costs for residential properties. However, these characteristics may not be reflected on the sketch.

The shape or configuration of the structure also has no bearing on the valuation or insurability of the structure for commercial properties, thus sketches are not needed as often. The square footage, type of construction, number of stories, story height, physical attributes, and occupancy are all factors considered during the underwriting process for commercial structures. This is similar for assessments for residential properties, but sketches don’t always include these characteristics. While the diagrams emphasize the structure’s basic shape or footprint, those aren’t as important as some of the other physical characteristics that can be noted or illustrated another way.

Aerial images can offer more detail and home characteristics, as well as property condition, that traditional sketches can’t.

Technology Enhances Imagery

Other types of images and data resources may be more helpful in the underwriting process. Technology and record keeping have improved what information is already available without the need for sketching. Underwriters can use aerial imagery, photographs, drone footage, and other InsurTech tools that provide needed characteristics of a home or business. These can offer a visual of a structure’s features and dimensions.

Satellite imagery can provide a broad overview of what the building looks like, the slope and characteristics of the property, and parcel boundaries, as well as what the surrounding area is like to help identify potential risks. High-resolution aerial imagery can also depict property condition and showcase many of the building’s characteristics, including roof and siding. For a look at change over time, historic aerial imagery also exists. Having images that show structural conditions at the time of underwriting the policy can help an adjuster avoid overpayment on a later claim if the insurance carrier knows what it was like pre-loss.

There are other resources that have square footage and architectural data used for underwriting, such as county property tax documents. Though some underwriters and insurance carriers request accurate sketches to depict square footage, others are happy if the data provided is in line with what county tax records and the policyholder have reported.

Sketches can be used to confirm square footage of a property to help underwriters make accurate policy decisions.

Sketches Can Be Supplemental

Sketching can be used to verify the data is correct. Accurate sketches may give underwriters a visual of the structure, such as if it has contemporary shape or style, and the height of the ceilings. They also serve as evidence to back up the reported data. Plot sketches of farms and apartment and condo complexes are still viable to give underwriters and reinsurers distances between structures to find out the probable maximum loss.  Sketching can provide supplemental information to help underwriters make decisions.

Customize Your Underwriting Assessment Reports to Include What You Need

JMI Reports, a national risk assessment partner for insurance carriers, uses InsurTech tools to provide accurate data to meet all your information-gathering needs. JMI’s assessments can include photographs and aerial images. Want a sketch included? We can do that as well. Customize your report to have what you need at your fingertips.

Find out more about what data JMI Reports provides in assessments to help you make policy decisions.

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