Commercial Property
Ever wonder what all those terms on your insurance declarations page mean? It’s important to understand them as a property owner as it will determine the way you are paid out on a loss. We’re here to help you interpret the complex nature of commercial property insurance policies.
Usually written on a replacement cost basis, property insurance will reimburse you for insured perils that result in damage to your property. There are several property valuations that your policy may be written with that are extremely important to consider. Here’s an overview.
Replacement Cost: the cost to restore your property back to its original condition before the covered loss occurred.
Actual Cash Value: replacement cost minus the depreciation of the property.
Agreed Value: this is an amount that is requested by the insured and agreed upon by the carrier and suspends any coinsurance penalties.
Coinsurance provision: requires the property to be insured for a certain percentage of the property’s full replacement cost. Each policy’s requirement will vary and that percentage will be the maximum amount paid out on a claim if the total building limit on the policy is less than that amount.
Another important limit on property insurance policies is protection against inflation. Property insurance reimburses you for labor costs and building material to restore your building back to its condition before the loss. Construction costs rise every year and can leave you significantly under insured without having an Inflation Guard rider on your policy.
Inflation Guard: this offers additional coverage to your building limit at a certain percentage each year to help keep up with rising construction costs.
In addition to having automatic increases for inflation, you may also need coverage to rebuild your property to newly regulated building codes. Ordinance & Law coverage will pay for the costs to demolish, remove, and rebuild your structure to current code.
Allow us to review your current policy at no cost to ensure that your property has the protection needed.
Usually written on a replacement cost basis, property insurance will reimburse you for insured perils that result in damage to your property. There are several property valuations that your policy may be written with that are extremely important to consider. Here’s an overview.
Replacement Cost: the cost to restore your property back to its original condition before the covered loss occurred.
Actual Cash Value: replacement cost minus the depreciation of the property.
Agreed Value: this is an amount that is requested by the insured and agreed upon by the carrier and suspends any coinsurance penalties.
Coinsurance provision: requires the property to be insured for a certain percentage of the property’s full replacement cost. Each policy’s requirement will vary and that percentage will be the maximum amount paid out on a claim if the total building limit on the policy is less than that amount.
Another important limit on property insurance policies is protection against inflation. Property insurance reimburses you for labor costs and building material to restore your building back to its condition before the loss. Construction costs rise every year and can leave you significantly under insured without having an Inflation Guard rider on your policy.
Inflation Guard: this offers additional coverage to your building limit at a certain percentage each year to help keep up with rising construction costs.
In addition to having automatic increases for inflation, you may also need coverage to rebuild your property to newly regulated building codes. Ordinance & Law coverage will pay for the costs to demolish, remove, and rebuild your structure to current code.
Allow us to review your current policy at no cost to ensure that your property has the protection needed.