AVI combines detailed inventory with valuation and appraisal

Rough Notes, Dec 2002 by Pillsbury, Dennis

Enhance relationships with clients, increase revenues and boost EGO protection

Five years ago, three brothers-Greg, Jeff and Randy Forman-started a company called Asset Verification, Inc. (AVI), after one of their friends experienced a devastating fire. "They lost about $300,000 in assets because they didn't have the appropriate documentation and didn't have the correct amount and type of insurance," Randy, AVI's chief operating officer, explains. Randy operates out of the head office in Batavia, Illinois, a suburb of Chicago. Greg, president, is in the Mobile, Alabama, office, and Jeff is in Birmingham. All corporate functions-advertising, technical support and interface with insurance companies and client groups-are handled out of the Illinois office.

The company operates predominantly in the south and southeast. "We pretty much cover everything from Texas and Oklahoma east, although we've done work in Maine, Colorado, Michigan and Illinois as well," Randy says. "We'll soon have an office in Manhattan and intend to expand in the Northeast.

"We didn't come out of the insurance business," Randy notes. "We just recognized a good opportunity. There was a need and we filled it." He continues by pointing out that "the fact that we're not from the insurance industry actually has been a plus. We're seen as an independent third-party appraisal service. It helps to avoid perceived conflicts of interest."

AVI provides businesses, churches and individuals a complete inventory of their possessions and offers a program that will update the inventory and valuation annually. "But we've gone one step further," Randy notes. About two-and-a-half years ago, we added the valuation and appraisal piece to the puzzle. This allows us to give the client the insurance replacement amount they need to have for their insurance coverage. That really sets us apart. We're able to appraise any item from Civil War memorabilia to fine art to rare stones. (The company actually uses outside geologists when asked to appraise gemstones.) We subscribe to a number of different database systems and pull the information regarding current pricing of collectibles and other items of value. We've found that most people and businesses are underinsured by a minimum of 40%."

Advantages for agents

The advantages to agents are obvious. By taking a proactive approach to determining the value of your clients' property:

* You enhance your relationship with your clients by demonstrating your desire to make certain their assets are fully protected.

* You increase your revenue as your insureds boost coverage to reflect the actual value of their belongings.

* You lessen the likelihood of an E&O action after a loss because your clients will be fully insured or will have made a decision (in writing) not to purchase the additional coverage that they needed.

* If there is a loss, you will have a documented asset inventory that will help to speed up claims processing.

"Our number one priority is to make certain our clients are adequately insured," Randy says. "We always recommend that they get in touch with their insurance professional."

How it works

Depending on the size of the property, an AVI person or group of people will go into the home or business and create a detailed inventory of the contents using voice-activated data entry and customized inventory software. "We really take our time to make certain that we've completed a thorough inventory," Randy says, pointing out: "We recently inventoried the contents of an estate in Atlanta. It took two people three full days to complete the inventory."

The information is entered into a passwordprotected database. Important documents, photographs and other similar property are digitally scanned to ensure replacement of sentimental and heirloom possessions, whenever possible. Annual updates are available. AVI keeps a current copy of the inventory. They also can do barcoding that can incorporate varying levels

of details for identifying and tracking items such as furniture and computer equipment.

The inventory process incorporates the documentation needed for accurate appraisals of antiques, artwork or other valuables. AVI has a nationwide network of appraisers that will provide appraisals quickly so that adequate insurance can be obtained.

"We have bonding and E&O coverage, so the client is well protected. In addition, all our people know that if there ever is a robbery, they'll be the first people questioned by the authorities," Randy notes, adding: "That has been a good selling point when we bring it right to the forefront. Our service has been embraced by affluent customers. We actually are viewed as consultants and advisors. As part of our services, we'll advise them if we see anything they can do to improve security or better protect a particular piece of art or an antique."

In 2003, AVI will launch a curator program for those individuals with substantial collections, many of which exceed $50 million in artwork. "There's a certain skill set that is required for these people," Randy points out. "There's a long laundry list of things that need to be done. Many of these individuals loan out their artwork and need to know about the proper crating and insurance coverage during transit. We're in the process of hiring a person with extraordinary credentials in this area."