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Building Insurance Limit


Most of us think that we will never put in a claim on our insurance policy. It always happens to someone else, right? Well, when it does happen to us we are most always shocked. With that in mind, let’s say one day you do have building damage. You contact your insurance broker and take the necessary steps to have the adjuster look at this. The adjuster asks you to provide 3 quotations from general contractors. You do this and a contractor is chosen, but while this is happening the adjuster confirms that the dollar amount of coverage on your policy is at an adequate level. It always costs you if you are under-insured. A general example of this is; you insure at half of the rebuilding cost. You then only pay half the premium. The insurance company therefore will only pay approximately half of the claim. You will have to pay the other half yourself to have the repairs done. You have become a partner or a co-insurer with the insurance company.

An Insurance Broker who specializes in your particular industry will know more about the rebuilding costs than one who does not. However, an insurance broker is an expert in insurance products, he is one who advises and arranges for the issuance of policies with insurance companies that meet your coverage requirements. He is not a contractor or an appraiser. Two similar buildings can vary in replacement cost by more than 25%. An actual appraisal is recommended. Ultimately you are responsible for your livelihood and it is a lot easier to fix an under-insurance problem before the damage occurs.