TimeSharing Today | Jul / Aug, 2026
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The Intersection of Reserve Studies and Insurance
RESORT SOURCES
By Gary Porter, FMP, RS, RRC, CPA
Reserve studies are most commonly viewed as budgeting tools for property owners, associations, and commercial portfolios. However, when examined from a broader perspective, they offer significant value to insurance brokers, underwriters, carriers, and adjusters. In practical terms, a reserve study functions as a forward-looking risk report-one that can help the insurance industry move from reacting to losses toward predicting and preventing them.
Reserve Studies as a Risk Assessment Tool
A reserve study provides a detailed inventory of major building componentssuch as roofs, HVAC systems, plumbing, and structural elements-along with their age, condition, and remaining useful life. This information allows insurance professionals to better understand the current state of a property and anticipate future risk.
For underwriters, these insights help evaluate the likelihood of equipment failure or structural issues that could lead to claims. Brokers can use the same data to proactively address concerns before presenting a risk to the market, improving the quality of submissions. Carriers benefit from a clearer view of whether a property is being properly maintained or is at risk of deterioration.
Predicting Loss Potential and Pricing Risk
One of the strongest indicators of future claims is deferred maintenance. Reserve studies highlight whether funding levels are aligned with upcoming capital needs. Properties with underfunded reserves may delay necessary replacements, increasing the probability of loss. Conversely, wellfunded reserves signal disciplined asset management and reduced risk volatility.
This information allows underwriters
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to make more informed decisions regarding risk selection, pricing, and coverage terms. It also enables meaningful differentiation between similar properties. For example, a building with a funded roof replacement plan presents a significantly better risk than one with an aging roof and no financial plan.
Supporting Loss Control and Resilience
Reserve studies can also serve as a roadmap for loss prevention. By aligning capital improvement schedules with risk engineering recommendations, insurers and property owners can address vulnerabilities before they result in claims. For example, if a system is scheduled for replacement but poses an elevated near-term risk, mitigation efforts can be accelerated.
In catastrophe-prone regions, reserve studies provide insight into whether components are being upgraded or replaced in kind. This creates opportunities to encourage more resilient construction-such as