5 Tips for Choosing a Commercial Property Insurance Plan
If you are one of the many new or existing owners of commercial property in America, now may be a good time to consider purchasing commercial property insurance to protect yourself in the event of a catastrophic event occurring on your property.
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If you are one of the many new or existing owners of commercial property in America, now may be a good time to consider purchasing commercial property insurance to protect yourself in the event of a catastrophic event occurring on your property. Here are 5 tips to help you choose a commercial property insurance plan that suits your needs:
- Don’t go with the first quote you see
It is possible to be sidetracked by the first insurance plan you are offered. If you shop around, however, there is a good chance that you will discover a more worthy insurance package. Why? There are many variables to consider. They range from overall price to what will and will not be covered; and, while some firms have stellar reputations, other providers are known for how difficult they make it to get a payout when needed. So it pays to do your research, which leads us to our second tip.
- Know your terminology
While “insurance speak” may seem daunting or complex at first, it really isn’t hard to understand once you master a few key definitions. Take some time to brief yourself on key terms the industry uses. Know the difference, for instance, between terms like excess, premiums, deductibles, and more. Investopedia is an excellent free resource where you can brush up on insurance lingo.
- Watch out for unexpected costs
Some insurers may not explain all the costs and variables upfront. For example, you could end up with a high-deductible insurance plan, meaning that, before a payout is made, you will have to spend a significant amount of out-of-pocket money before you can make your insurance claim. Let’s say a major fire seriously damages—even destroys—one of your warehouses. And let’s assume your commercial property insurance covers up to $2 million in repairs but has a $200,000 deductible. This means you must cover the first $200,000 of costs to repair your property, before your insurance company pays anything. While deductibles are certainly a normal feature of property insurance policies, their amounts can vary greatly from policy to policy.
- Understand the tax implications
You can save a significant amount of money on your taxes by purchasing insurance, since it is tax deductible. When planning your financial models for your commercial property business, be sure to factor in the insurance costs as a write-off.
- Consider an insurance bundle
There are many different types of protections offered by insurance companies, including flood insurance, tornado insurance, fire insurance, and many other types of coverage. These can be purchased individually; however, if you bundle your insurance coverages, there is a strong possibility that you will not only save money but you may also get better protection for your commercial property.
Source: Written by Stephen Robert Morse for “Small Biz Ahead” by The Hartford.