As California wildfires recently burned through millions of acres and affected thousands of businesses, our agency was able to volunteer and help victims understand their coverage, and more importantly, get the most money out of their policy.
How much coverage did we buy?
When there’s a claim that’s the question we all ask, “How much coverage do we have? Paying insurance premiums seems pointless, until you have to ask that question. When we’re talking about a commercial fire policy the bulk of the money is going to be in the “declarations page”. That page should spell out the initial value of the policy. Problem is the declaration page is sometimes buried in the policy so you might have to dig through the policy in order to find it. Once you find the declarations page, look for this information:
If you own the building:
What is the value have on the building?
Beyond the building you have tools, equipment, and office furniture
What is the value have for property inside the building (business personal property)?
Buckets of Money
You might think of those two items as buckets of money: You’ve got one bucket of money for the building, and one bucket of money for the property in the building, often called business personal property. One quick way to double check and see if you’ve got enough building coverage is to take the value of the building listed on the declaration page, and divide that number by the square footage of your building. That calculation will let you know how much insurance money you’ve bought, per square foot, to rebuild your building. How’s that number look: Too high? Too low?
The other bucket of money we mentioned is the property inside the building, business personal property. Take a look at the property in your building, how much would it cost to replace everything that’s not attached to the building? How’s that number look: Too high? Too low?
More Buckets of Money?
Most policies have additional coverage money listed deep in the policy. Some of the limits can be as high as $25,000 and may be in addition to what you see listed in the declarations page. Money for debris removal, pollution clean-up removal; you might even have some coverage for your personal property at the business location. The additional coverages can add up to real money.
The California Department of Forestry and Fire Protection (Cal Fire) has said the 1.8ml acres burned in California’s 2018 fire season make it “the worst in recorded history”, and experts aren’t giving future seasons a better outlook. Taking a few minutes to double check your property fire coverage limits will put your business in the best position to weather the coming storm.