TIV: Getting Total Insurable Value Right on Your SOV
TIV is the number everything else keys off — limits, rate, cat modeling, treaty capacity — and on most SOVs it's quietly wrong because its components haven't been verified in years.
The client's TIV says $84M. Building values were last updated in 2021, business income is a placeholder from two brokers ago, and contents are a flat 10% guess across every location. That $84M is driving every number on the quote.
Why it matters
- The pain point: TIV components — building, contents, BI — get carried forward unverified renewal after renewal.
- What it costs today: underinsurance that surfaces at claim time (and coinsurance penalties with it), or inflated values that overpay premium for years.
- Why the usual workaround falls short: applying a blanket inflation trend to stale values compounds the original error instead of correcting it.
What actually makes up TIV
Per location: building replacement cost, contents/business personal property, and business income with extra expense. Portfolio TIV is the sum — which means one systematically wrong component skews everything. A flat contents percentage across a portfolio of offices, warehouses, and manufacturing is a systematically wrong component.
The construction-cost problem
Replacement costs moved sharply over the past several years, and values set before that repricing are materially off unless deliberately trended. Underwriters know this — visibly stale values invite either an ITV challenge or a margin clause.
How TIV errors surface
Three ways, all bad: at claim time, when the recovery doesn't rebuild the building; at underwriting, when the carrier's ITV analysis contradicts the SOV and credibility is lost portfolio-wide; and in cat modeling, where wrong values produce wrong loss estimates and wrong pricing.
Keeping TIV honest
Benchmark building values against replacement-cost data on a cycle, replace flat contents assumptions with occupancy-based estimates, and revisit BI values whenever the client's revenue picture changes. Then maintain it: a TIV that lives in a versioned, centralized record — the way SOVAI stores each client's schedule — shows what changed and when, instead of forcing archaeology on a spreadsheet every renewal.
Key takeaways
- TIV is only as good as its least-verified component.
- Stale values cost money in both directions — underinsurance at claims, overpayment in premium.
- Version the values: knowing when a number was last verified is half the battle.
SOVAI keeps TIV components organized, versioned, and audit-ready across renewals. Learn more at sovaitech.com.
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