Definition:Statement of values
📄 Statement of values is a detailed schedule submitted by a policyholder — or compiled by a broker on the policyholder's behalf — that lists insured property assets along with their locations, descriptions, and declared monetary values. In commercial property insurance, the SOV is the foundational document that underwriters use to evaluate the risk they are being asked to accept, set appropriate premiums, and structure coverage terms. It typically includes building values, contents and inventory values, business income exposures, and relevant construction and occupancy details for each location.
⚙️ Once an underwriter receives the statement of values, they cross-reference the reported data against catastrophe models, property valuation benchmarks, and their own portfolio aggregation limits to determine how much capacity they can deploy and at what price. A well-prepared SOV enables accurate risk assessment because it captures granular detail — square footage, construction type, fire protection class, and proximity to flood zones or earthquake faults — that generic summaries would miss. In large commercial or industrial accounts with dozens or hundreds of locations, the SOV may run to thousands of line items and is frequently exchanged in standardized spreadsheet formats that align with the data requirements of reinsurance placements and cat modeling platforms.
💡 Accuracy in a statement of values directly influences the quality of coverage a policyholder receives. Understated values lead to coinsurance penalties or inadequate policy limits at the time of a loss, while overstated values inflate premiums unnecessarily. For carriers and reinsurers, aggregated SOV data across a book of business is essential for managing concentration risk and purchasing appropriate catastrophe reinsurance protection. The growing use of geospatial analytics and automated valuation tools in insurtech is making it easier to validate and enrich SOV data, reducing the manual effort and error rates that have historically plagued this cornerstone of property underwriting.
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