Accurate property values have always been an important part of a commercial insurance program. However, rising construction costs, severe weather, new technology and longer rebuilding timelines have made the accuracy of those values more critical than ever.
A recent Zurich North America article, “Accurate Property Values Are Vital in a Changing Climate,” emphasizes that a company’s Statement of Values should be more than a spreadsheet updated shortly before renewal. It should be treated as an essential risk-management tool that supports underwriting, catastrophe modeling and a business’s ability to recover after a major loss.
For business owners, the concern is not simply whether a building is insured. The more important question is whether the property, equipment and business income exposures are insured accurately enough to support a full recovery.
The Risk of Outdated Property Values
A Statement of Values typically includes buildings, equipment, inventory, business personal property and business income exposures by location. Insurance carriers use this information to evaluate the organization’s total exposure and establish appropriate limits, deductibles and pricing.
When those values are incomplete or outdated, the consequences may not become apparent until a loss occurs.
A building purchased or valued several years ago may cost significantly more to reconstruct today. Zurich cites Verisk data showing that U.S. commercial reconstruction costs increased 4.1% between April 2025 and April 2026. Labor availability, material prices, supply-chain constraints and building-code requirements can all increase the ultimate cost and time required to rebuild.
If insurance values have remained relatively flat while those costs have increased, a business may face:
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Insufficient limits to fully rebuild or replace damaged property
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Larger-than-anticipated out-of-pocket expenses
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Coinsurance or valuation disputes
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Delays during the claim adjustment process
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Inadequate business income protection
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Greater difficulty resuming operations after a major event
The goal is not simply to increase values each year by an arbitrary percentage. The goal is to understand what it would realistically cost to recover the business under current conditions.
Severe Weather Is Changing the Property Conversation
Commercial property owners are also facing a broader range of weather-related exposures.
Zurich notes that severe convective storms—including tornadoes, hail, straight-line winds and intense rainfall—have become a major source of insured losses. These events can affect areas that may not have traditionally been viewed as high-risk catastrophe zones. Secondary weather perils accounted for a record 92% of global insured catastrophe losses in 2025, according to research cited by Zurich.
For Oklahoma businesses, this is particularly relevant. A property insurance strategy should consider more than a building’s basic replacement cost. Roof age and construction, exterior materials, equipment exposure, drainage, backup power, protective systems and the geographic concentration of locations may all influence the organization’s risk profile.
Accurate values give carriers and risk-management professionals better information to evaluate these exposures. They can also help businesses determine where physical improvements or loss-control investments may have the greatest impact.
Do Not Overlook Technology and Operational Changes
Buildings are becoming more technologically complex. Automation systems, specialized machinery, data infrastructure, battery storage, electric vehicle charging stations and other connected equipment can add significant value to a facility.
These systems can also create additional business interruption exposure.
A piece of specialized equipment may be insured for its purchase price, but that number may not account for installation, freight, engineering, programming or the time required to obtain a replacement. Similarly, damage to a building automation or technology system may prevent a facility from operating even when the physical building remains largely intact.
Zurich recommends incorporating new technology, operational changes and modern infrastructure into the Statement of Values rather than relying solely on traditional building and equipment calculations.
Whenever a company expands, purchases equipment, remodels a facility, changes production processes or adds technology, its property values and business income assumptions should be reviewed.
Business Income Deserves Equal Attention
Property valuation is not limited to the cost of repairing a building. Businesses must also consider how long it would take to resume normal operations.
Construction delays, permitting requirements, equipment lead times, labor shortages and supply-chain disruptions can extend recovery well beyond the physical repair period. A business income calculation based on an outdated or overly optimistic restoration timeline could leave a company without adequate protection before operations fully resume.
A thoughtful business income review should consider:
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Current revenue and operating expenses
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Seasonal fluctuations
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The expected time to repair or rebuild
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Equipment and material lead times
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Temporary relocation expenses
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Key suppliers and dependent properties
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Extra expenses that could shorten the interruption
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The time needed to regain customers or production levels
These conversations require input from finance, operations, facilities, leadership and the insurance team. They should not be handled as an isolated renewal task.
Questions Business Owners Should Be Asking
As part of a commercial property review, business leaders should consider several questions highlighted by Zurich:
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When were our property values last professionally reviewed?
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Do the values reflect current replacement costs at each location?
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Have building-code and ordinance requirements been considered?
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Are new equipment, renovations and technology included?
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Does our business income limit reflect current operations?
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Is the estimated restoration period still realistic?
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Have supply-chain and labor constraints been considered?
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Are our insurance limits aligned with our actual recovery plan?
The answers may reveal gaps that cannot be solved by simply purchasing a higher limit. Some exposures may require updated appraisals, risk-engineering support, revised business continuity plans or changes to the structure of the insurance program.
Moving From Insurance Placement to Recovery Planning
At Dillingham Insurance, we believe property insurance should be evaluated as part of a broader risk-management and business-continuity strategy.
Our role is not limited to collecting values and submitting them to insurance carriers. We work with clients to understand how their operations have changed, identify potential valuation gaps, evaluate business interruption assumptions and present their risk clearly to the underwriting marketplace.
Accurate information can strengthen underwriting confidence, reduce surprises during the claim process and help create a more realistic path to recovery. It can also allow businesses to make better decisions about deductibles, limits, risk improvements and the amount of risk they are prepared to retain.
As severe weather, construction costs and technology continue to reshape commercial property exposures, businesses should not wait for a loss—or even the next renewal—to determine whether their values are accurate.
A proactive property valuation review today can make a meaningful difference in how successfully a company recovers tomorrow.
Source: Joffre Mishall, “Accurate Property Values Are Vital in a Changing Climate,” Zurich North America, July 17, 2026. This article is provided for general informational purposes and is not intended to provide legal, accounting or coverage advice. Insurance coverage is subject to the terms, conditions and exclusions of the applicable policy.
