Building Replacement Cost Value: Difference between revisions

Latest revision as of 11:52, 10 December 2024

The Building Replacement Cost Value (BRCV) is the cost to replace a building or unit, including the foundation, using the same type of material and construction, without factoring in depreciation.

The BRCV is used as a rating factor for determining flood insurance premiums but does not impact the replacement cost determined at the time of loss.

The ratio of building coverage selected to the BRCV affects the premium.

How BRCV is Determined

FEMA Determination:

For occupancies insured by the Dwelling Form, FEMA calculates the BRCV using application data and property-specific industry data.
If FEMA cannot determine the BRCV, the insurer must obtain it using common industry appraisal methods and report it on the application form.

Insurer Responsibility:

For occupancies insured by the General Property form and the RCBAP, FEMA does not determine the BRCV. The insurer is responsible for determining, documenting, and maintaining the BRCV in the underwriting file.

Documentation Requirements

Records must be validated and updated at least every three years. The NFIP accepts cost estimators and appraisals as evidence of BRCV. Statements of values for commercial properties are also allowed.

Documentation is not required for:

Non-residential manufactured/mobile buildings.
Storage/tool sheds or detached garages.
Buildings or units with less than 1,000 square feet.

This page contains information about the NFIP. Find more NFIP Resources.

@@ Line 10: / Line 10: @@
 '''FEMA Determination''':
-* For some occupancies (e.g., single-family homes), FEMA calculates the BRCV using application data and property-specific industry data.
+* For occupancies insured by the [[SFIP#Policy_Forms|Dwelling Form]], FEMA calculates the BRCV using application data and property-specific industry data.
 * If FEMA cannot determine the BRCV, the insurer must obtain it using common industry appraisal methods and report it on the application form.
 '''Insurer Responsibility''':
-* For other occupancies (e.g., residential condominiums), FEMA does not determine the BRCV. The insurer is responsible for determining, documenting, and maintaining the BRCV in the underwriting file.
+* For occupancies insured by the [[SFIP#Policy_Forms|General Property form]] and the [[SFIP#Policy_Forms|RCBAP]], FEMA does not determine the BRCV. The insurer is responsible for determining, documenting, and maintaining the BRCV in the underwriting file.
 == Documentation Requirements ==
+Records must be validated and updated at least every '''three years'''. The NFIP accepts cost estimators and appraisals as evidence of BRCV. Statements of values for commercial properties are also allowed.
-Supporting documentation must include:
-* Recent appraisals of the building and foundation based on replacement cost.
-* Records must be validated and updated at least every '''three years'''.
 Documentation is not required for:
@@ Line 26: / Line 23: @@
 * Storage/tool sheds or detached garages.
 * Buildings or units with less than 1,000 square feet.
-== Impact on Premiums ==
-*
-* If a policyholder selects coverage above the BRCV, the higher coverage amount is used to calculate premiums.
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