May 2021 Issue: The Importance of Insuring Property to Value-The Importance of Insuring Property to Value by Diane Swerling

The Importance of Insuring Property to Value by Diane Swerling

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When it comes to property insurance, it is important for clients to insure their properties to their full value to ensure adequate coverage. Insuring to value means purchasing enough insurance to cover the cost of replacing the damaged property. Clients should also consider purchasing additional coverage, such as replacement cost coverage, which provides the full cost of replacing a lost item, less the depreciation amount. It is important to include enough ordinance or law coverage to cover the additional work required to bring a building up to code. <br /><br />Coinsurance is a cost-sharing clause that allows insured businesses to save money on premiums by insuring the property to a specified percentage of its full value. However, clients should be aware that choosing a lower percentage of coinsurance can affect the payout of a claim and result in out-of-pocket expenses.<br /><br />Personal property coverage should also be considered, as the default limit is typically 70% of the building limit, which may not be enough in the event of a catastrophic loss. Theft coverage may also have low limits for certain items, such as cash, jewelry, and silver.<br /><br />When crafting a policy, insurance carriers often send out cost estimators to evaluate the property. It is important for the broker to be closely involved to ensure the property is insured to value and avoid any pitfalls.<br /><br />Engaging with a local insurance agent who can provide personalized attention and service is valuable for homeowners and business owners. Local agents understand local conditions and can provide assistance in handling claims.<br /><br />Overall, clients should be informed about the importance of insuring to value and reviewing their insurance coverage annually to ensure they have adequate building coverage. By understanding the different elements of property insurance and working closely with a broker, clients can protect themselves from potential financial losses.

Keywords

property insurance

insuring to value

replacement cost coverage

ordinance or law coverage

coinsurance

cost-sharing clause

personal property coverage

theft coverage

local insurance agent

annual insurance review