What is a Loss History?
A loss history is a documented history of damages or losses connected with a given asset. While used in several different applications, the term is most commonly associated with a loss in value of commercial and residential properties. In many cases, an insurance company will prepare what is known as a loss history report that details any and all events that caused significant damage to the property in any manner. Histories of this type are invaluable for prospective buyers, as the contents of the reports help make it easier to determine if the purchase price and the degree of risk associated with a given property is acceptable.
This loss of history may have to do with just about any event that caused some type of property damage. For example, an insurance loss history report will include information about vandalism to the property that resulted in severe damage to buildings on the property. This would include vandalism that has a significant effect on the efficiency of the electrical wiring, plumbing, or air conditioning systems. Any damage to the structure itself, such as the foundation of the building, will also be included.
Along with detailed information about the extent of the damage, the loss history report will also include information on what was done to repair the damage. This information is also helpful, because it gives prospective buyers the opportunity to determine if those repairs were sufficient to compensate for the damage. In the case of a damaged plumbing system, a prospective buyer will want to know if the repairs were made using quality components, or plumbing fixtures that were of lesser quality than the ones that were destroyed.
Damages of any type are included in a loss history report. Along with vandalism, any damage resulting from break-ins, fires, damage caused by natural events such as floods, lightning, hurricanes, or earthquakes, and even damage caused by a leaky roof are routinely included. Details such as the time period in which the loss occurred, the cost involved in the repairs, and details of how the repairs were effected are often common elements in the body of the report.
A comprehensive loss history does not just point out the potential problems with a given property. In some cases, the information contained in the report can actually point to a benefit inherent in the property. For example, if the roof of the main building was damaged by wind a few years ago, but replaced completely using high quality materials, this actually tells prospective buyers that the new roof should last for many years before it must be replaced. For people who want properties that require little upgrades in the short-term, information of this type can actually increase interest in the property rather than discourage buyers.
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