Inflation Factors are Missing.Some property policies, particularly dwelling policies in personal lines, lack automatic inflation adjustment factors. These same policies often get less attention than other personal lines policies. Agencies that do review these policies annually often are reluctant to complete new ITVs annually due to the time and difficulties involved. The result is these properties may become grossly under insured over time.
If an agency is writing property that lacks automatic inflation adjustments, for whatever reason, consider creating a complete ITV review of these risks at least every three years. Discuss the best method for determining the ITV with each applicable carrier. If you cannot get the insured to respond to your requests for updated information, document your file appropriately.
By regularly addressing the need to increase coverage, the insured will have better coverage and the agency will decrease their E&O exposure and make more money. Even if it is just a little bit more money, over time these little sums add up!