If you have made investments in commercial real estate, you should look into getting commercial property insurance. Your commercial real estate investments are important parts of your portfolio and you need to protect it. When you are thinking about how to get insurance, you should start with the companies that you work with already. Here are some considerations you need to make when you are looking to buy affordable insurance for your commercial property.
- Make sure you get the amount of coverage that you need. You may have gone through something like this when you bought homeowner insurance. Getting this right is much more important when you are buying commercial property insurance. When you are asking about how to get insurance, you will find that it is crucial that you get exactly what you will need. The commercial property insurance needs to be there if you suffer a theft, fire or other damage by events that are covered in your policy. You need to be able to totally rebuild any physical structures that are on your property.
- Work with your insurance broker to determine how much insurance coverage you need. You should not use real estate values or your tax valuation to make this determination. Again, you need your insurance to cover replacing everything so you should work on finding out how much that actually would cost. Having a sense of what things cost may help you down the road if you need to use your insurance. You need to make sure you are talking to an insurance broker you trust. You need to get enough insurance to cover rebuilding but you need to know that you are not buying more than you really need.
- Get an extended plan. When people are looking at how to get insurance and what kind of commercial property insurance is needed, you may want to get an expanded policy. The majority of commercial property insurance policies do not cover damage by hurricanes, by wind or by flooding. Some natural disasters require additional insurance coverage. If you are in an area that sees a lot of rain or is on the coast, you should talk to the insurance broker about flood coverage. Some areas require commercial business owners buy the policies that cover all of those natural disasters and flooding.
- Think about business interruption insurance. If you run a company and you have to close down because of a natural disaster or fire, you could lose a lot of money. There is such a thing as “business interruption insurance.” This can help a business owner deal with the expenses they have while the business has been closed down due to repairs that are being made or from a covered incident. You can talk to the insurance company about adding this coverage to your commercial property insurance policy. This can be a lifesaver if a hurricane comes through or a storm like Super Storm Sandy that can shut you down for weeks or months.
- Make sure you comply with all local, state and federal regulations. Look at the age of your commercial property. For the most part, commercial property insurance will not cover making improvements, repairs or any replacements that bring a structure into compliance with rules and regulations for the area. This is not a big deal for younger buildings that are in compliance before any covered event occurs and does damage to it. There are a lot of older commercial buildings out there. Because of the age of the buildings, they are allowed to not follow the building codes and regulations for the area because they are what is called “grandfathered” into the system. Should one of these buildings be damaged in a covered natural disaster, the upgrades that would be needed to bring that structure into compliance may not be covered by your property insurance policy. You fan deal with this situation by adding ordinance insurance coverage or compliance insurance to the commercial property insurance policy you buy or by getting a separate policy just for that.
When you think about how to get insurance, you need to have a clear head to get what you need and not what you don’t.