All historic commercial property owners have to find what kind of insurance will provide the right coverage for their historic property. Just like any home or automobile, insurance is going to be a given to keep your assets protected. But in the case of a historic property, specialized coverage is needed.
While searching for the coverage that suits you might seem like a difficult channel to navigate, it doesn’t have to be impossible. Whether the building you want to insurance is a theater, museum, church, office or home, take a look at these basics to help make certain that your historic property will stand for years to come. This is how to find the right insurance coverage for your historic property:
How Much is Really Replaced with Replacement Cost?
When talking about replacement cost, it’s imperative to know what kind of coverage you’re getting: replacement cost or actual cash value. The definition of replacement cost value is the cost to place with “like, kind and quality” after a loss, not regarding depreciation. However, this doesn’t always work when it comes down to a historic building. If your property is in pretty bad shape, it’s going to cost more for coverage. Replacement cost means that things will be similarly replaced, but it will be done with minimum requirements. That means if there’s special work that goes into your property, you’re probably not going to get it. You will get work completed to make your property whole again.
Actual cash value is more complicated because it adds in depreciation. Instead, look into historic replacement cost: with this type of coverage, you’re getting replacement, repair and restoration all in one. It’s the ultimate form of coverage for your property.
How Much Coverage is Needed?
If you haven’t upgraded your coverage limit in the last five years, you might be underinsured. There are all kinds of costs to think about, including labor, fuel and supply and demand for the materials that you have to acquire.
On top of increasing costs over the years, one must also think about the increase and severity of natural disasters across the world. If your building has a policy with a co-insurance clause while underinsured, you’re going to have some issues to deal with. This clause means that you need to maintain a minimum limit of property insurance for your building. If you don’t have that coverage, the insurance company can decrease your claim payment. The best way to determine the type and how much coverage you’ll need is through an appraisal. From there, talk to an insurance agent. They’ll recommend whatever coverage and add-ons that will fit your historic property.