Managing a COI real estate commercial property requires vigilance, expert management skills and a level of mastery when dealing with insurance companies and insurers.
Here are a few tips on getting the most out of your COI real estate commercial property.
Covering the Basics
So, what’s the basic coverage you should be looking for in a COI real estate for commercial properties?
A good insurance coverage is an all-encompassing contract that protects everything within your premises. This includes your furniture, equipment, signages, fences and landscape, important documents, inventory, and property near you. You’ll also want theft, fire, and flooding to be included as basic features of your policy.
You will need to discuss this with your insurance broker though. Some insurers don’t provide as much coverage as you would like or it is not included on the outset and is regarded as an add-on. That means you’ll be paying for what is supposed to be a basic inclusion rather than getting it as part of the package.
For this, it is highly advised that you employ the services of an expert insurer or an insurance broker who is looking out for your best interests.
When to File an Insurance Claim
Contrary to popular belief, you don’t need to make an insurance claim every time something happens to your building. Sometimes, not filing a claim is just as important. It all depends upon the gravity of the situation.
Let’s say you encountered some minor flooding. Do you need to report it? Is the damage minimal enough that you can pay for it out of pocket? If the answer is yes, then you don’t need to file a claim for it.
Now you may be asking: why?
You have the COI real estate; you should get something out of it right?
Well, here’s the thing: insurance companies are always looking for ways to drive your premium up. It is a business, after all. Filing a claim on a minor incident will still count against you and you might end up paying too much for your insurance per year.
You don’t want that. You want your resources to be focused on maintaining the building and adding features that will grant you better insurance coverage and policy discounts.
How To Get a Better Deal on Your Insurance
Insurance policies aren’t the same across the board. To get the best deal, you must approach several different providers to see what they have to offer. Once you secure one, you’ll also want to know how you can get a better deal on that insurance. Here are some tips:
- Ask Questions – securing an insurance policy for your commercial real estate is a huge investment. You’ll want to get the most out of your money for the coverage you get. Sometimes, the best deals they have to offer aren’t necessarily the ones you need. Sometimes the one they have to offer can be improved further by asking questions. Does it cover flooding protection? What about wind protection? Acts of God clauses. These are just some features that you might want included in your policy. So, make it a point to inspect the deal and ask how you can improve it by adding on features.
- Go For Insurance Brokers Instead of Going to the Bank – where should you get your COI real estate? Should you head to the bank or deal with an insurance broker? This decision is entirely up to you. But, let’s weigh the pros and cons. Insurance brokers make money through commissions. Therefore, it is in their best interest to get you the best deals so that they can make money. A bank employee won’t do that for you. They will still want to get you approved but at the end of the day, these are salaried employees who get paid whether you get your money’s worth or not.
- Encourage Tenants to Invest in Renter’s Insurance – taking out a COI real estate for your commercial property instantly protects your entire property. But that means it’s a blanket coverage that pays out on a whole or, at best, minimal for units within the establishment. Let’s say a tenant within your commercial property experiences some damage. What they would get as compensation would be what is stipulated within the policy which only covers general repairs. That means they’ll only get enough to get back up and running and nothing more. You, as the COI real estate policy owner suffer the cost of shouldering the repairs and driving your premium up. Now, if they had tenant insurance on top of your COI real estate, their individual tenant insurance would pay out first before cutting into your policy. Sometimes, you won’t even need to file a claim because the amount needed is small enough to be an out-of-pocket expense. This is a win-win situation as it assures your tenant better compensation and it doesn’t burden your COI real estate as much as it would if they didn’t have tenant insurance. So, go ahead and encourage your tenants to take out an insurance policy for their peace of mind.
- Improve Your Commercial Property Regularly – one way to get the best insurance deal is to constantly improve your commercial property. Not only does this give you the potential of securing the best insurance deal but it also helps raise the rent. Appraisers often do a drive-by to check the properties. Checking the establishment on a deeper level is often reserved for when your insurance needs to be renewed. Installing security cameras throughout the property says you are always vigilant and are trying to prevent theft from taking place. Improving your landscape makes your commercial real estate a more inviting establishment therefore increasing the probability of securing high-value customers. Establishing a fence throughout the property increases the security and reduces acts of vandalism that could cause unnecessary alarm. Improving all the units regularly helps raise the rent cap. Think of it as putting your best foot forward. It’s a win-win situation for your insurance provider and your business.
Keep Your COI Real Estate Updated
In parting, taking out an insurance policy for your establishment and for your tenants require a highly organized documentation process. You can simplify this by using a COI tracker to ensure everything is updated and you reduce the risk of any policies expiring or lapsing.
You could also designate a person within your organization to keep a close eye on these documents with the help of a COI tracker to make their life easier.
Give us a call if you need assistance on this matter.
We’re always happy to help.