HOW MUCH INSURANCE SHOULD
YOU BUY?
Source: Every Landlord’s Legal Guide
By:Marcia Stewart, Attorney’s Janet Portman & Ann
O’Connell
Obviously, the greater the amount of coverage, the higher the
premiums. You do not want to waste money on insurance,
but you do want to carry enough so that your business can
survive a lawsuit or natural disaster.
Be sure to carry enough insurance on the building to rebuild
it. There is no need to insure the total value of your
real property (land & structures), because land does not
burn.
If you are not sure how much it would cost you to rebuild,
order an appraisal. (Be sure to get a rebuilding quote, not a
quote on the sales value of the structure.) Because the
cost of rebuilding tends to increase over time, it is wise to
get a new appraisal every few years. Your insurance
agent should be able to help you.
Basic fire insurance contracts cover the actual cash value of
the structure, not its full replacement value. But
policies are routinely available with replacement cost
coverage. This is the coverage you want.