Insurance to Value

Commercial Insurance with Matthew Robblee CAIB, CIP

Insuring Buildings to Value a Key Consideration for Business Owners

You’re in the middle of the worst case scenario. There was a fire. Your business has been destroyed. But everyone is safe and you’re insured, so it’s going be okay.

Now you’re on the phone with your insurance professional and learn your policy only covers the amount you paid for the building, not the cost of replacing what you’ve lost. Your property was not insured to value, and you can’t afford to rebuild.

And the worst case scenario just got worse.

“There can be a huge difference between how much you paid for a commercial property and how much it would cost to replace that property,” explains Matthew Robblee from Caldwell Roach Insurance, “For example, you paid $100,000 for a building, but if you had to start from scratch, that same building could cost $300,000.”

If your building was insured for $100,000 and not $300,000, it was undervalued and underinsured.

“Ten years ago, it was commonplace,” Matthew goes on, “but then there were simply too many instances of buildings being underinsured and clients being unsatisfied with their providers, so the insurance industry as a whole had to work to improve the situation.”

That includes using industry-approved tools to determine the replacement value of your property, and make sure your property is adequately covered.

“However, ultimately, the client dictates the value of their coverage,” Matthew goes on, “If you determine your policy based on the monthly premium and not the level of protection it offers, you take the risk of being underinsured and having to make up the difference.”

However, being underinsured isn’t always a considered risk a business-owner takes; in many cases, policy holders simply don’t understand their coverage.

“Be proactive. Ask questions. And review, review, review,” Matthew stresses, “When you receive your renewal each year, take the time to read it, then come in and spend 15 minutes with us to go over any changes that could affect your coverage.”

This process allows your insurance professional to reassess and adjust your policy based on factors such as inflation, building use, construction costs and property improvements.

Taking the time to talk to an insurance professional about the importance of insuring to value could save you thousands of dollars, not to mention your business, in the long run.

“We’re here to give you piece of mind,” concludes Matthew, “We provide the protection so you can spend your time focusing on your business and not worrying about that worst case scenario.”

For more information on Commercial Insurance, contact Matthew Robblee at mrobblee@cral.com or 902.893.4204.