Six Factors Deciding Property Insurance Premium Rates

If you are looking for a commercial property insurance to insure your business, the following are the factors which can be deployed to decide premium rates:

  1. Geography – With this, the insurer can determine environmental risks which your business can face, like an earthquake, flooding, etc. For instance, if your company is situated near the seashore, the insurer can charge an extra premium to cover the risk of flooding, etc.; the possibility of which is high in this case.
  2. Size of business premise –  Undoubtedly, a large office or factory building will cost more to insure than smaller premises, like a single room.
  3. Safety and security –  How many safety equipments have you installed in your company? Is your company located in a theft prone area? Or, does your business engage in hazardous activities? The answers to these questions can affect premium of your property insurance policy.
  4. Age of building – As old buildings are more susceptible to losses or damages, insurers charge a high property insurance premiums. For instance, a fire erupted at your business premise due to short-circuit in the old electrical wiring could translate into expensive repairs if the building requires being rebuilt again. For such old buildings, the insurer will charge a high premium.
  5. Type and age of equipment – If your business involves the use of heavy equipments and machinery, the insurer will charge an exorbitant premium to cover them. Similarly, the age of equipments also determine your insurance premiums. You may likely to pay a higher premium if your equipment is difficult to repair because of scarcity or if it’s likely to get damaged more frequently due to heavy use.
  6. Replacement value vs claim after deduction –  With replacement value coverage means, the insurer would make a payout which would be enough to replace damaged items with brand new equipments. Then you can also go with the other option, under which the insurer makes a payout after deducting depreciation. On the brighter side, such type of insurance policies cost less.

Read More: What is property insurance and How to buy it?

As now you can see, there are various factors which help in generating premium quotes for commercial property insurance policies. But taking the time to analyse all these facts means carefully, you will buy a custom-fit property insurance policy for your business and in this way, you can have the right coverage without paying for the excessive premium amount. And should unforeseen situation strike, your business will be on its feet. It’s more a better thing than picking up a property insurance policy that might look right only to realise later that it is not sufficient to cover your expenses.

Insurance is a tricky field, and therefore, to ensure that you choose the right property insurance policy, you can take help of corporate insurance advisors like SecureNow, which will help you in finding the right insurance plan. You only need to submit some basic details about your requirements and business, and you will get insurance quotes obtained from different insurance companies. These can be compared to choosing the one and in this way, you can find that policy which offers extensive coverage at affordable rates.

Overall, the purpose of commercial property insurance is to secure your business from unforeseen events and monetary losses that you would have to incur if any mishap arise. So, instead of focusing only on decreasing premium rates, one should focus more on finding the comprehensive property insurance even if it means shelling out extra premium. Remember, under-insurance is equal to no insurance.

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