It is hurricane season, and there is no better time for our industry to rededicate itself to the basic underwriting principle of Insurance to Value.

Lessons learned from past catastrophes show that foregoing ITV homework can be very risky business. The task is all the more difficult in a troubled real estate market amid hotly competitive insurance conditions, yet it's a must.

First, a quick refresher on what ITV is, and is not. ITV is the ratio of the amount of insurance to the value of the insured property risk. It is not to be confused with the insurance limit, which is the amount of insurance the underwriter contractually agrees to provide in the event of a covered loss. Values and limits are different concepts, with different purposes (although interrelated) in property underwriting.