So, you are looking for commercial property insurance to insure the building your business owns or leases along with the commercial property. But do you know, what are those mistakes you should avoid at the time of buying commercial property insurance? Keep reading and ask yourself, “Am I committing any of these?”
1. Covering only the building –
It is good to think about insuring the building structure but what about the income it generates? The right commercial property insurance will also come with an added feature of rent loss. It means, if you can’t collect rent due to some reasons from a person who takes your building on rent, the insurer will compensate you for the same.
See: Factors that decide property insurance premiums rates
2. Not purchasing enough insurance coverage –
It is a human tendency to save money, but when it comes to insurance, this habit can prove disastrous. A few bucks save today can easily turn into thousands of rupees worth of expenses later. Remember, buying commercial property insurance means that you want to protect your property from unexpected situations, but how will it help you if it is not enough? What is the purpose of buying an insurance policy when you would have to recoup losses from your pocket?
What if your building burns to the ground? In the absence of commercial property insurance, you would have to bear the entire coverage on your own. Even if you have insurance, if it is not enough, you would have to write checks all by yourself.
3. Choosing the policy on the basis of premium only –
Taking the above discussion forward, if you decide to zero in on a commercial property insurance policy that offers lower premiums then think again! In addition to the age of the property, there are various factors also which decide the premium rates and therefore, if you go for lower insurance coverage, the chances are high that you might be missing the essential For instance, does the policy offering lower premium include replacement cost coverage?
4. Not understanding what you are purchasing
You bought commercial property insurance but do you know what it includes? Depending on the size of your business, the value of your commercial property insurance can run into the thousands. You need to carefully read the fine print before you sign on the dotted line. Don’t buy the insurance just for the heck of it!
5. Deductible too high or low
A deductible is the amount of money that the insured pays before the insurer pays out the rest of the claim. A higher deductible deters policyholders from approaching the insurance company for every single claim. However, increasing the deductible limit to lower the insurance premium can go against you. At the time of the claim, the insurer will reimburse the amount above the deductible limit and the remaining part of the claim will be borne by you. Similarly, if you have a too-low deductible, you are paying additional So, go to that deductible limit that you can easily afford.
Our Advice
The world of insurance is tricky, and therefore, it is imperative to carefully understand the nitty-gritty of commercial property insurance and make the right move. You can approach corporate insurance advisors like SecureNow and make the entire process of buying commercial property insurance a hassle-free process. Here, you will get insurance premium quotes obtained from various insurers which you can compare to find the right policy.
About The Author
Shivani
MBA Insurance and Risk
She has a passion for property insurance and a wealth of experience in the field, Shivani has been a valuable contributor to SecureNow for the past six years. As a seasoned writer, they specialize in crafting insightful articles and engaging blogs that educate and inform readers about the intricacies of property insurance. She brings a unique blend of expertise and practical knowledge to their writing, drawing from her extensive background in the insurance industry. Having worked in various capacities within the sector, she deeply understands the challenges and opportunities facing property owners and insurers alike.
