PSPIC Policy Updates

1. How is the replacement cost of my home calculated?
   
   
2. Who is Marshall & Swift/Boeckh (MSB)?
   
   
3. What is Residential Component Technology (RCT)?
   
   
4. What does reconstruction cost include?
   
   
5. How does Pacific Select Property calculate the replacement cost of my home and all of its unique features?
   
   
6. What if I did not complete the survey?
   How did Pacific Select Property calculate the replacement cost of my home?
   
   
7. Why is calculating the most accurate replacement cost so important?
   
   
8. How do I know Pacific Select Property will be able to pay my claim in the event of an earthquake?
   
   

1. How is the replacement cost of my home calculated?
   Pacific Select Property is using the Residential Component Technology (RCT) replacement cost calculation tool from Marshall & Swift/Boeckh (MSB) to determine replacement cost values.
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2. Who is Marshall & Swift/Boeckh (MSB)?
   Marshall & Swift Boeckh (MSB) is recognized in the real estate and insurance industries for their significant research and efficient, reliable technology and services.  Eighty percent of the top rated Property and Casualty insurers use MSB data to make risk management decisions.  MSB has built the most validated localized building cost database in the industry.
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3. What is Residential Component Technology (RCT)?
   RCT is a data driven solution developed by MSB and used by Pacific Select Property to calculate replacement cost values.  RCT is built on MSB’s “total-component” methodology, which calculates risk-specific reconstruction costs for each home using readily identifiable interior and exterior home characteristics.  The emphasis on reconstruction is important because the cost for reconstructing a house after a total loss is far different than constructing the same house as new construction.
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4. What does reconstruction cost include?
   Some factors included in reconstruction cost are:
   • Extra costs to tear out damaged materials or demolition and debris removal
   • Compliance with changing building codes
   • Availability of skilled labor; fewer contractors specialize in reconstruction than new construction
   • Special features and materials often associated with older homes become more costly or are not readily available
   • General Conditions (permits, fees, architect fees, etc.) and General Contractor overhead and profit
   • Loss of buying power/reduced economies of scale
   
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5. How does Pacific Select Property calculate the replacement cost of my home and all of its unique features?
   In 2009, surveys were mailed to all of Pacific Select Property’s residential earthquake customers.  The survey was designed to capture both exterior and interior construction features of the home, including items such as floor coverings, wall coverings, kitchen appliances and bathroom features.
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6. What if I did not complete the survey?
   How did Pacific Select Property calculate the replacement cost of my home?
   Typical characteristics for the area and home will be used to supplement the property information currently on file, as well as public record information in calculating the replacement cost value.
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7. Why is calculating the most accurate replacement cost so important?
   Calculating replacement costs that are as accurate as possible increase the chances of having enough insurance coverage to reconstruct your home after a catastrophic loss.  Other large catastrophic events in California such as earthquakes and wildfires have shown that many homeowners did not have proper coverage limits and therefore did not have enough insurance coverage to rebuild their home.
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8. How do I know Pacific Select Property will be able to pay my claim in the event of an earthquake?
   GeoVera Holdings, Inc., and its wholly owned subsidiaries which includes Pacific Select Property Insurance Company, has been assigned a rating of “A“ Excellent by A.M. Best Company, June 2011. The A.M. Best Company is a leading source of information on the financial condition and performance of insurance companies worldwide.
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