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What would I get if half of my building burns?
Facts:
My Building is insured under a Landlord Policy that states Replacement Cost on the Declaration Page for $200,000.
Answer:
That depends.
"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 insurance@drickardinsurance.com or 607-843-8860.
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 repair the building receiving the full value to repair the damaged structure if, in most cases, you where insured within 80% of the full replacement cost value of your building. Please check your policy carefully as policy rules differ from one to another even with the same insurance company. However, let’s say the actual cost to replace your building runs 30% more than what you are insured for and the rule in the policy the building must have been insured for 100% of the replace cost. In this case the insurer will decrease the amount they would have normally paid for the loss by 30%.
What if you want to just take the money and not repair the building? In most cases the insurer will only give you only the actual cash value of the damaged portion of the building at the time of loss. In many cases we see this amount to be half or less of the settlement you would have received otherwise.
What option is right for you? That may vary from customer to customer and building by building. 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 us at 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 at 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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