Helping Your Clients Maintain Accurate Statements of Value 

• By: Nancy Germond
• May 20, 2026

Your role as an agent extends beyond selling policies; you are also a trusted risk advisor. Although the standard of care in your state may be an order taker, one allegation of negligence can hit your agency’s deductible, as well as its reputation.  

What is a Statement of Value? 

A State of Value (SOV) schedule is a detailed inventory listing all the physical assets the insured wants to insure. The ACORD Statement of Values form 139 is what many property insurers accept. It should include the following information. 

• Physical location of the insured property, including the street address, city and state, and unit numbers if applicable. The city, state and zip code allow underwriters to review crime stats and other items such as fire codes applicable to that property. 

• Type of construction and any disclaimers 

• Frame (Class 1) 

• Joisted Masonry (Class 2) 

• Non-Combustible (Class 3) 

• Masonry Noncombustible (Class 4) 

• Fire Resistive (Class 5) 

• Year built (original year) If major updates, be sure to include those upgrades, such as ADA accessibility, new roof, wiring upgrades, security improvements, etc.  

• Square footage of total floor area 

• Number of stories 

• Building value (an estimated replacement cost, not including the land) 

• Business personal property value, including the following which the client should cover elsewhere, or at least address.  

• All moveable assets 

• Furniture 

• Inventory 

• Machinery 

• Computers 

• Equipment 

• Specialized equipment if housed in the building, such as the following. 

• Manufacturing equipment 

• Commercial kitchen appliances 

• IT infrastructure 

• Primary Use 

• Type of business or operations at the location, such as: 

• Retail 

• Office 

• Manufacturing 

• Warehouse 

• Restaurant 

• Fire Suppression System 

• Sprinkler 

• Dry Chem or CO2 system 

• Foam systems 

• Fire Alarms & Detectors 

• Smoke 

• Heat 

• Manual Pull Stations 

• Monitored Fire Alarm 

• Security Systems 

• Burglar Alarms 

• Surveillance Systems 

• Access Control Systems 

• Security Guards (and hours if applicable) 

• Fencing 

It is critical that your insureds respond accurately. For example, referring to an Ansul or other fire suppression system affirms that it is currently usable. If the need for this system becomes an insurance policy warranty, then the system/item/service must work as intended when a loss occurs for coverage to apply. A best practice is to remind your insureds of all warranties at each renewal, or whenever the carrier adds a new warranty.   

The Importance of Updated Statement of Values 

One of the most critical areas where you can help protect your clients is by reminding them to maintain an accurate SOV. An outdated SOV is a ticking time bomb, exposing businesses to severe financial risks like underinsurance and coinsurance penalties.  

Proactively guiding your clients through the SOV update process not only reinforces your value but also can help difficult conversations if the carrier denies a claim or reduces the payout due to coinsurance, schedule error, or lack of limits. While it is impossible to estimate how many SOVs are badly outdated, suffice it to say that many, many errors and omissions claims arise because of inadequate property values or missing structures on a property schedule.  

This article offers simple steps and talking points to help you educate commercial insureds on the importance of an accurate SOV. By turning this annual task into a collaborative review, you not only strengthen client relationships, but you also help to ensure proper coverage and help to avoid an E&O claim. 

From An Administrative Task to Strategic Review 

Unfortunately, many of your clients view the SOV as “just another form to complete.” Your first step is to reframe that perception. This may take repeated educational efforts. One of the most frustrating things I found as an agent was when my clients were “just too busy” to meet with me. When that happens, be sure to email your client who declines a meeting to memorialize that declination in your agency management system. Something as simple as an email to your insured that says, “I offered to meet to discuss your statement of values. You were unavailable. Once you are available, please reach out to me so we can help to ensure your statement of values is current.”  

I also suggest using direct email, social media and even snail mail to clarify that their SOV is foundational to a thorough property insurance program.  

It is the most important evidence that determines their coverage limits, premiums and the potential outcome of a future claim. Importantly, offer to visit their facility if possible, or schedule an online meeting to discuss their SOV. If they are in another state, they can walk through their facilities with you on a Zoom or Teams call so you can view their property. Send this reminder mid-year or a few months before renewal. There is never a wrong time to re-evaluate property locations and values.  

Positioning the SOV review as a strategic risk management consultation rather than a data-entry exercise, clients are more likely to agree to meet and to engage more thoughtfully. As their trusted advisor, stress that your goal is to assist them to ensure their assets are correctly valued and fully protected, not increase your commission.  

The High Cost of an Outdated SOV: Key Talking Points for Clients 

To achieve client buy-in, you must clearly explain the substantial risks of an outdated SOV. As always, move beyond insurance jargon such as using acronyms. Use real-world scenarios to illustrate the consequences of an outdated property schedule. 

The Underinsurance Gap 

The most pressing danger to your client of an inaccurate SOV is underinsurance after a loss. Construction costs, including labor and materials, have increased dramatically since COVID changed the face of our supply chain. A valuation even a few years old may leave a client dangerously exposed. 

Present an example. Say, “Imagine your building was valued at $2 million three years ago. With construction costs rising [a certain percentage] since then, the true replacement cost today could be at least $2.3 million. If a total loss occurred, you would face a $300,000 gap that your policy would not cover. Our goal is to close that gap so in the event of a large loss, you can rely on the adequacy of your coverage.” 

Always Discuss the Coinsurance Penalty Issue 

Coinsurance clauses can confuse both agents and clients. Explain simply that the clause is a risk-sharing agreement: the insurer requires them to carry coverage up to a certain percentage of the property’s value (typically 80-90%). 

If they take the time, walk them through the penalty calculation. Keep it simple. “Your policy has an 80% coinsurance clause. Your building’s actual replacement cost is $1 million, so you must insure it for at least $800,000. If your SOV lists a value of $700,000, you face an underinsurance penalty. In the event of a $200,000 partial loss, the insurer might only pay you $175,000 ($700k insured / $800k required), leaving you with a $25,000 penalty.”  

This clear yet simple example demonstrates the financial hit they could take with the application of a coinsurance penalty. 

Discuss Realistic Deductibles 

It may be time for high-value property owners to consider putting more skin in the game by taking higher property deductibles. I was recently in the Dakotas where agents informed me that their typical homeowners’ deductibles were now $2,500. 

With the still-climbing property insurance increases, you may have already had that discussion with your clients. However, it’s always a good strategy to discuss various deductible options with them and provide a quote outlining potential savings.  

You never want them to say, “You never offered me that option.” 

Losing “Agreed Value” Protection 

The “agreed value” provision is a powerful tool that waives the coinsurance clause, but it requires appropriate values and is therefore conditional. While many agents obtain this endorsement for their clients, they may fail to stress the annual SOV update requirement. 

Prior to each renewal, remind clients that, with the agreed value provision, they stand to lose money if they face outdated valuations. Frame the protection as a benefit they receive, but only if they actively update property values. Say, “We obtained the agreed value coverage to protect you from coinsurance penalties. However, it is only valid if we submit an updated SOV each year. Without it, the carrier reinstates the coinsurance clause, and you lose that valuable protection.” Then be sure that you diary an appropriate SOV review before each renewal.  

Correcting Overpayment on Premiums 

The conversation is not always about risk and “bad” events but also on cost savings. If a client has disposed of assets, sold a property, or if market values have depreciated, especially in cat-exposed areas, they may overpay for insurance. However, the cost to rebuild a home that has depreciated in market value will still be at historical highs given construction costs and inflation.  

Focus on cost-savings (on the minds of everyone these days) as a positive talking point to initiate the SOV review. Say something such as, “Let’s take some time to review your SOVs to help ensure you do not pay for coverage you no longer need. An accurate valuation ensures your premiums best align with your actual risk.” 

A Proactive Agent’s Guide to SOV Updates 

Knowing when and how to update an SOV helps you provide added value to your clients. Guide your clients through this process to make it as seamless as possible. 

What Should Trigger a Review 

Educate clients that an SOV update is not just an annual event. Other key events should trigger an immediate review. Consider the following, which of course, you may only know about significant changes unless you add a Google notification about your client or read local newspapers for your larger clients.  

• Annual renewal: This is the standard, non-negotiable time for a full review. 

• Any major capital improvement projects: A must-do after renovation, expansion, or new building construction. 

• Significant asset changes: When acquiring or disposing of high-value machinery or equipment. 

• Properties changing hands: Of course, this is necessary at any time the property changes hands or even property management teams. Each PM team is different, and it is critical they understand any policy warranties such as active burglar alarms or fire-suppression systems. 

• Times of economic volatility: During periods of high inflation or when construction costs surge, it is time to update. Advise clients that in some markets, a semi-annual check-in might be prudent. 

How to Gather Accurate Values 

Clients often default to using book value or market value, which do not correlate for insurance valuation for coverage purposes. Guide them toward calculating the full replacement cost but remember to never choose the limit. Impress upon your clients that valuation is their responsibility. Remind them that if they have concerns, their best course is to hire an appraiser or a general contractor to develop a solid valuation. And always document these conversations and suggestions, even if only with a follow-up email.  

Here are some tips to avoid falling into an E&O trap.  

• Recommend professional appraisals: Remind clients that you are not a real estate expert. Especially when clients own high-value or complex properties, independent appraisal is the gold standard. Have them find qualified professionals through their trade associations rather than necessarily providing a referral. 

• Provide cost estimator tools: Leverage your access to industry-specific construction cost estimators. Offer to run a preliminary report for your client to give them a reliable starting point. This is a high-value service that demonstrates your expertise. Again, however, document your caution that this is only an estimation. The ultimate responsibility to provide accurate replacement cost limits rests with the policyholder.  

• Offer a comprehensive checklist: Provide clients with a clear checklist of the data they need to gather for each property. This should include COPE data (Construction, Occupancy, Protection, Exposure) and separate values for the building, business personal property, machinery and business income (BI) requirements. 

Solidify Your Role as a Trusted Advisor 

An accurate Statement of Property Values is the core of a solid commercial insurance program. By shifting the conversation from a tedious administrative task to a vital strategic review, you help your clients make informed decisions about their risks. 

Your proactive guidance in this area protects your clients from underinsurance, prevents claim disputes and reinforces your role as an indispensable partner. Take the lead on SOV accuracy, and you will build stronger, more resilient client relationships that last years to come.  

Reminding your clients of the importance of updating their SOV at least annually is critical to protecting your agency against negligence allegations.  

Copyright © 2026, Big “I” Virtual University. All rights reserved. No part of this material may be used or reproduced in any manner without the prior written permission from Big “I” Virtual University. For further information, contact nancy.germond@iiaba.net.