Managing buildings is no child’s play. As a good manager, you must learn how to manage the risks of your industry. Whether you are a condominium syndicate, a landowner (residential buildings, commercial premises, shopping center, cooperative, real estate park) or a property manager, our insurance brokers take the necessary steps to advise you and develop risk management plans that are advantageous for you.
AFER Group Ltd. can implement the strategy you need:
- Building Insurance & Loss of Income
- Equipment breakdown
- Commercial general liability
- Liability of directors and officers
- Liability for errors and omissions / Professional liability
- Lease bonds
- Environmental responsibility
- Responsibility in hiring practices
- Trustees’ liability
- Hotel Innkeepers liability
- Cyber risk and network security
- Legal insurance
- Accident insurance for owners and their staff
In real estate, you must be extremely careful about the application of this rule, since the majority of insurers usually apply it. The co-insurance rule may vary from one insurer to another. It usually varies between 80% and 100%. As it is your responsibility to ensure that your property has adequate insurance, we strongly recommend that you have your property appraised by an accredited appraiser. The goal is to insure you properly.
If you are not insured sufficiently for a total loss, you will be the only one responsible for the lack of insurance and you may not be able to rebuild. In a partial loss, the insurer will apply the co-insurance rule. Also, if you are insufficiently insured, you become a co-insurer and you will be penalized.
Our commercial insurance brokers can help you better understand this clause and guide you according to your needs.
Here is an example :
Your building is insured for $ 500,000 and your reconstruction cost is $ 1,000,000. The co-insurance clause of your insurance contract on the building is 90%. Following a partial loss, you suffered $ 300,000 in damages. Here’s how the insurer would compensate you:
Curent insurance amount X Damage amount
% of the co-insurance clause X Cost of reconstruction
500 000 $ X 300 000$ = 166 667$ Amount of the indemnity minus the deductible.
90% X 1 000 000$
You can see, by this example, that the insurer would compensate you for $ 166,667. You would then suffer a financial loss of $ 133,333, and this amount would be added to the deductible to which you subscribed.
Through the example above, you can see how the application of the co-insurance clause can hurt you financially. A lack of insurance can delay the completion of some future projects, may prevent you from making the necessary repairs and sometimes even cause you to declare bankruptcy.