Insurance Factors to Consider when Purchasing a Building

Contributing Author: Mark Rogina, CPCU

There are multiple factors to consider when purchasing a commercial property.  Price, location, functionality, and taxes are certainly a few of the factors a prospective building owner will consider when purchasing a property, but another factor that should be considered will be the cost to insure the building itself.  In this article, we’ll focus only on factors as it relates to the property insurance itself for a new building, ignoring the needs for other important coverages for the building such as general liability.

When reviewing a building for commercial insurance, insurance companies tend to focus on the acronym C.O.P.E.  The letters in C.O.P.E. reference Construction, Occupancy, Protection, & Exposures:

Continue reading Insurance Factors to Consider when Purchasing a Building

Insuring to “Value” & Coinsurance Clause

Contributing Author: Mark Rogina, CPCU / Wirtz Insurance Agency, Inc.

You’ve just purchased a new piece of commercial real estate.  When it comes time to insure it, your insurance agent provides you with a commercial insurance quote in which the building replacement value is much higher than you actually paid for it.  Since you invested a lesser amount into it, why would you insure it for more? You only want to be covered for what you actually paid for the piece of property.

Unfortunately, this is a scenario that plays out all too often.  The market value of property ends up being far less than what it actually might cost to rebuild the building from the ground up.  To understand this fully, it is important to define some key terms:

Market Value – the cost to purchase a property

Replacement Cost – the cost to rebuild a property using today’s construction methods and materials Continue reading Insuring to “Value” & Coinsurance Clause

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