1-610-406-5827
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West Reading, Pa. 19611
FIVE UNIT AND ABOVE PROPERTIES
Five Unit and Above Properties
Business Owners Policy
A BOP
as it is more commonly referred to is an insurance policy that may cover 1 to for units and above. It can also allow for more than 1 property on a single insurance policy.
Types of Forms Used for Loss Settlement
Basic Form
This policy would cover named perils only. (Fire, Lightning, Windstorm, Hail, Explosion, Riot, Aircraft, Vehicle, Smoke if sudden and accidental) Also paid on an actual cash value basis.
Broad Form
Broad form covers a larger list of coverages which might also include as follows- Burglary Damage, Weight of Ice & Snow, Glass Breakage, Accidental discharge of water or overflow, Falling objects, Frozen Pipes, Electrical Damage, Collapse.
Special Form
All but excluded losses. Common exclusions would be- Ordinance of Law, Earth movement or Earthquake, Neglect, War, Nuclear Hazard, Intentional Loss, Mold, Governmental action, Sinkhole, Mine Subsidence.
Loss Settlement Options
AVC
This is actual cash value or agreed value policy. This is settled on a replacement cost less depreciation, with a stop loss at the agreed value.
Modified Replacement Cost/ Repair
This is a policy where you agree to change the materials used in the event of a loss to decrease the replacement cost in an effort to lower the replacement cost in turn lowering the cost of the insurance.
Replacement Cost
The term replacement cost
or replacement value
refers to the amount that an entity would have to pay to replace
an asset at the present time, according to its current worth.
Click the below button for an example of how replacement cost is determined.
Other Things to Consider
Co Insurance
A type of insurance in which the insured pays a share of the payment made against a claim. For example, if you have 80 percent co insurance you will still be responsible for 20 percent of the cost of the loss after your deductible.
Co Insurance Penalties
A buildings replacement cost actually valued at $1,000,000 has an 80% coinsurance
clause but is insured
for only $750,000. Since its insured
value is less than 80% of its replacement value, when it suffers a loss, the insurance
payout will be subject to the under reporting penalty.
Flat Roof Properties
These properties are less desirable because of water damage issues. If you deal in these properties you will have less options and may only be afforded a basic or Form 1 policy by many carriers.
Pools and Hot Tubs
Pools and hot tubs pose a higher liability risk. Because of this high risk, many carriers will not allow them at tenant occupied properties. If these are present at any of your investment properties, assume a higher insurance cost that you may want to surcharge for.
Dogs and Exotic Pets
Tenants with dogs and exotic pets can limit your options for insurance carriers. Most carriers will not extend liability coverage for any exotic pets. Most carriers also have lists of unacceptable dog breeds. The list varies by carrier, but most common unacceptable breeds include any cross-breeding with a wolf, pit bull, doberman, rottweiler, akita or mastiff breeds.
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