Do you think you pay too much for tenant occupied property insurance?
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Facts:
My Building is insured under a Landlord Policy that states Replacement Cost on the Declaration Page for $200,000.
Answer:
Maybe.
"Typical insurance answer," you say.
If you were not involved in burning the building down and you are going to rebuild a like kind and quality structure on the same premises you would probably, over time, get your contractors and suppliers paid for the reconstruction cost of your building. If your building is insured to 100% of the actual current value to replace then you may have enough money to replace the old structure.
However, if you have not calculated the demolition of undamaged structure, debris removal and current building code costs, you may find that you are still short of funds. Handily these things may be dealt with by policy endorsements. Ask you agent to help you with coverage that will aid in covering hidden and often unexpected costs of construction after a loss.
Contact our income property team for more details at 607-843-8860 or insurance@drickardinsurance.com.
What if the building was insured for under 100% the replacement cost? Well, if you do not trigger a reason for the claim to be denied and you are going to rebuild on the same location a similar building you will probably benefit from the receiving the full value your building is insured for. However, let’s say the actual cost to replace your building runs 10% more than what you are insured for. In this case you will be about $20,000 short of the cost of construction. So, after your deductible you will have an additional out of packet expense.
What if you want to just take the money and not rebuild on that premises? In most cases you will not get the full amount of your replacement cost settlement option policy. The insurer will opt to give you only the actual cash value of the building at the time of loss. In many cases we see this amount to be half of the replacement cost of the building.
You may reason, “If that is the case why am I buying insurance?” That would be a great question. The answer to this is to buy the policy that fits you financial strategy and review your policies over time to make sure they still match your goals and needs. Contact insurance@drickardinsurance.com or 607-843-8860 for help doing this.
Yes we do want to sell you insurance, however we will work hard to find the insurance you want and fits you best.
Please keep in mind that this is not a complete explanation of how a claim would be paid. It is a rough estamation of what may happen. Your insurers claims department should be provided your specific questions to determine how they would handle a specific claim.
For more information and to find out if your tenant occupied property qualifies for the insurance policies we have found please contact us insurance@drickardinsurance.com or 607-843-8860.
Click Here to send us basic information for an insurance premium indication.
Did you find the answer to the question that you were looking for? You can check our other Frequently Asked Questions Here. Or if your question is not here, please contact us at insurance@drickardinsurance.com or 607-843-8860, or you can ask our agents on live chat that can be found on the left of the screen.
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