Building permit data provides valuable risk assessment, making it an essential tool for insurance underwriters. However, knowing that the data is available is one thing — implementing it is another. It’s like having a map and not knowing how to read it. While it can lead you to your destination, it won’t be of much use if you don’t understand the symbols and routes.
In this article, we’ll explore how to implement building permit data into your underwriting process and provide practical tips for using it.
Best Practices for Collecting and Analyzing Building Permit Data for Use in the Underwriting Process
Building permit data can provide essential insights for insurance underwriters, and collecting and analyzing it effectively is vital. Here are some best practices to follow:
- Gather data from reliable sources: Collect building permit data from local government agencies or reputable providers like ATTOM for more accurate and up-to-date information. Ensure the data can be easily integrated into your existing systems and has the capacity to scale with your property volume requirements.
- Verify data accuracy: Ensuring the building permit data is accurate and complete is crucial. Providers like ATTOM offer a significant advantage by testing their data in-house, speeding up the process for insurers. In addition, these data providers can recognize patterns in data reporting from thousands of jurisdictions.
- Data coverage and ingestion: Building permit data should be available in the majority of the markets where you write policies. Your data provider should ingest the data daily at a volume that will ensure you get timely insights into permitted projects.
- Use data analysis tools: Data analysis tools can help insurers understand building permit data and identify patterns and trends that may impact underwriting decisions.
- Identify potential risks: Building permit data can support insurers in hazard identification of a property, including incomplete or unsafe construction projects, as well as poorly-maintained systems, such as HVAC, electrical, plumbing, and roofs. This information can help determine appropriate coverage and mitigate risks.
How Insurers Can Integrate Building Permit Data into the Underwriting Process
Integrating building permit data into underwriting processes starts with identifying which building permit data project types are relevant to the underwriting process — it’s important to determine what data you want to collect before you begin collecting, storing, and analyzing it.
As you implement new processes, update your underwriting guidelines to reflect the use of building permit data and its impact on coverage decisions. Underwriters can use those guidelines to determine appropriate coverage and premiums based on relevant data points. To ensure compliance and accuracy, training on accessing, analyzing, and incorporating it is essential.
Finally, insurers should continuously monitor and evaluate the use of building permit data in their underwriting processes to ensure its effectiveness and make improvements as needed. This may involve adjusting the data collection process, updating underwriting guidelines, or providing additional training to staff members.
Common Challenges When Implementing Building Permit Data in Underwriting
Insurers may face challenges when implementing building permit data in underwriting, such as lack of consistency, data complexity, and the need for specialized tools to analyze it effectively. Another complication is data reliability, which can vary depending on the source. “Data quality, reliability, and coverage are critical factors when integrating building permit data into underwriting processes as it directly impacts the accuracy of risk assessment and policy decisions,” says Hal Bennett, Senior Vice President of BuildZoom.
Concerns may also arise about the additional time and resources needed to collect and analyze the data and the potential impact on premiums and coverage decisions. Privacy and data security questions may also arise, as building permit data contains sensitive information about property owners and their construction projects.
Building Permit Data Integration with ATTOM
Building permit data can provide insights into property values and risks for insurance underwriters, but it’s important to understand common challenges and best practices for collecting, analyzing, and incorporating the data. ATTOM can help.
ATTOM’s data collection methods are designed to provide underwriters with accurate and complete data by integrating building permit data with other property profile data such as MLS and tax assessor data. We collect this data from multiple reliable sources, including local government agencies and public records, and provide an “ATTOM” ID for each record, allowing for easy integration with these other data sets related to the property.