So You Have Insurance… But Do You Have Enough?
How high are the limits on your homeowners insurance?
If something happens, is it enough?
Have you taken these factors into consideration?
You need enough insurance to cover the cost of rebuilding at current construction costs. Don’t base your rebuilding costs on the price you paid for the building. With costs of materials rising, ensuring your building is covered with the right limits is especially important.
If your building is involved in an accident, certain important factors must be taken into consideration. Getting insurance for replacement cost will usually cover damage to the structure.
- A Replacement Cost policy pays for the repair or replacement of damaged property with materials of similar kind and quality.
However, if there is a catastrophic event, demand for construction workers and materials can push rebuilding costs above your policy limits, leaving you without enough money to cover the bill.
- Talk to your agent about extended replacement cost coverage.
Demolition, Full rebuilds, Partial Rebuilds
Also, if your building has insurance for rebuilding, but not for demolition and only half of the building falls, you still need to pay for the demolition out-of-pocket.
In a case where part of the building falls but can still be rebuilt, it is important to note that repairing and rebuilding parts of buildings can often be just as or more expensive than rebuilding the entire building from the bottom up. If situations like these are not well prepared for, they can leave your finances in shambles.
- Be sure your policy has enough coverage to include partial demolitions and rebuilds as well as complete rebuilds.
Law & Ordinance
Is your building older? Is it up to current construction codes? If it’s older and needs to be rebuilt to code, then you will end up paying much more for the rebuild than you expected, as the cost of updating the construction as well as materials will be much higher. It would be wise to ensure that you have the proper insurance limits as well as “Law & Ordinance” coverage, if applicable.
Improvements & Renovations
Have you remodeled or made improvements? Be sure to let us know about them! If something happens to them and it hasn’t been properly reported in your policy, your claim can be denied. Additionally, if a claim arises from these unreported changes and causes further damage to the rest of your property, a claim can be denied because the cause of the accident was not listed. Help us ensure your claims get paid and report changes to your premises.
Leases
For businesses, it’s a little different. If you lease, are you clear on whether you need to purchase the insurance for the building or not? It should be stated in the lease agreement, and is worthy of a double-check.
Please call or email us today to make sure your limits are where they need to be to protect yourself and your assets.
(877) 783 – 0335
© 2009, Mark S. Balcos. The reader assumes all responsibilities for his/her own actions in regards to any items discussed in this report. Adherence to all applicable laws and regulations, federal, state and local, governing the use of any product or service described in this report in the US or any other jurisdiction is the sole responsibility of the reader. The publisher and author assume no responsibility or liability whatsoever on the behalf of the reader of these materials. The reader is encouraged to consult directly with his/her insurance professional.
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