Calculators › Coverage & Limits

Insurance to Value Calculator

Check insurance-to-value (ITV), project values to the end of the term and find the minimum limit to meet coinsurance.

How the insurance to value calculator works

Insurance to value is the limit as a percentage of replacement cost. Because construction costs rise during the term, a limit that is adequate today can fall short by the time of a loss.

Formula

ITV = Limit ÷ Replacement cost. Projected value = Value × (1 + Inflation)^(Months ÷ 12). Minimum limit = Projected value × Coinsurance %.

How to use it

1. Enter current replacement cost and limit.
2. Choose the coinsurance percentage.
3. Enter expected construction-cost inflation and months to the end of the term.

Worked example

A $2.4M building insured for $1.85M is at 77% ITV. With 5% inflation the projected value is $2.52M, so 80% coinsurance needs $2.016M.

Frequently asked questions

What ITV should I target?

100% of replacement cost is the safest target; at minimum, meet the coinsurance requirement for the whole term.

What is an inflation guard?

An endorsement that increases the limit automatically through the term.

Guides

• The Coinsurance Penalty: How Underinsurance Shrinks a Property Claim

Related calculators

• Coinsurance Penalty Calculator — Calculate the property coinsurance penalty and insurance payment when a building or contents are underinsured.
• Building Replacement Cost Calculator — Estimate a commercial building’s replacement cost from square footage and cost per sq ft, with debris removal, ordinance or law and inflation.
• Total Insured Value (TIV) Calculator — Build a schedule of values and total insured value across locations: building, contents and business income.