A building permit database can be valuable to insurance companies for underwriting, claims handling, and marketing. However, underwriters, in particular, can reap the rewards. They say, “An ounce of prevention is worth a pound of cure,” and building permit data is a valuable prevention tool for underwriters.
In addition to providing information about the work done on a building, building permit data allows for critical insight into potential hazards that may affect the risk profile of the property. Using this information, underwriters can make better decisions, reduce their risk exposure, and minimize losses.
Improved risk assessment and avoidance
Building permit data is a treasure trove of information about a property’s construction, renovations, and additions. It can help identify potential hazards, from outdated electrical systems and faulty plumbing to insufficient fire protection.
This type of data can also help you identify risks from adjacent buildings and structures, including exposed walls, hazards, construction, and distance. Armed with the right information, underwriters can require property owners to address potential risks, reducing risk exposure, protecting themselves and their policyholders, and increasing loss prevention.
Increased efficiency and decision making
Access to accurate and current information when evaluating a property is crucial for making informed decisions in the underwriting process, regardless of the property’s location, age, or size.
Underwriters can use building permit data to supplement and verify inspection reports, appraisals, owner disclosures, and other documents. The additional verification helps to avoid unnecessary site visits or additional follow-ups, improving efficiency and reducing the time and cost of the underwriting process.
Building permit data can also automate and streamline straight-through processing (STP) for many policies. According to McKinsey, STP can eliminate the need for underwriter involvement in up to 95% of policies, reducing manual errors, delays, and costs associated with underwriting.
Greater visibility into property replacement value
A key underwriting element includes assessing replacement value. Building permit data can reveal whether a property has been well-maintained, which may increase its value or reduce damage vulnerability.
For instance, if a property owner has taken steps to maintain and improve their property, such as obtaining permits for renovations or upgrades, this may increase the property’s value, even if it is of the same age as a comparable property that hasn’t been as well-maintained.
Enhanced compliance
Properties that don’t comply with building codes and regulations can pose safety risks and may be more vulnerable to damage, resulting in costly claims. By using property data to verify compliance, insurers can help reduce potential liability issues for both themselves and property owners.
Verifying compliance with local building codes and regulations can give insurance underwriters an enhanced view of possible risks, leading to more accurate underwriting decisions and, ultimately, a more profitable portfolio.
ATTOM Leads a New Era of Insurtech Data
Building permit data is not only an ounce of prevention but also a valuable resource of data for insurance companies, particularly underwriters. By leveraging ATTOM’s data, insurance providers can gain critical insights to enhance risk assessment and management strategies.
ATTOM’s nationwide building permit data is considered one of the most comprehensive property data sources on the market, providing data on more than 200 million building permits gathered from over 2,000 building departments across the U.S.
