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Insurance problems and cures

Building insurance

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In commercial insurance competition continues hot and heavy. We’ve had case after case where we took our clients’ business out to market and found large price cuts. Take advantage of that while you can.

One question that comes up is, with the economy down, why won’t the insurance company agree to drop their estimate of the value of my building?

Simply, the stick and brick value of buildings generally doesn’t decrease much, if at all, when the market price of commercial real estate drops. Commercial property insurance starts with the replacement cost but adds in the extra costs of repairing rather than starting from a green field, and the cost to clean up the site, hauling away rubble rather than building from scratch. And the insurance companies throw in some factor for the extra costs of rebuilding after a catastrophe like a hurricane. Also, they simply don’t believe that buildings are, on average, adequately insured to start with.

By the way, if you want a powerful commentary on what doesn’t work in construction, take a look at Barry LePatner Barry’s written a couple of books savaging what he calls “the industry that time forgot.” “Broken Buildings, Busted Budgets” should be available on Amazon, or give GBW Insurance a call at 1-800-548-2329 and we can probably get a copy for you.

Written by gbwinsurance

July 26, 2010 at 2:50 pm

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