The cost of commercial building property insurance in Louisiana can vary per zip code
Some underwriting factors include but no limited to
- Original Year built
- Year of updates to electrical, plumbing, heating a/c and roof
- Construction of Frame, Brick Veneer, Non Combustible, Masonry Non Combustible
- Shape of Roof..Flat, Hip, Gable
- Claims History
How do you determine the insured value?
It is the cost to rebuild your building minus the land value
The rebuild cost can vary based on the type of materials used
If you try to under protect your property by lowering the insured value below replacement cost you could be hit with the Coinsurance Penalty
Once an insurance company determines the replacement cost of the building you may be allowed to insure the building to 80% -100% of the replacement cost
Example if you try to under insure the building
You have a building replacement cost at 200,000 but you only owe 100,000 and ask your agent to write a policy for 100,000
In this example you didn’t meet the coinsurance penalty of at least 80% (if the policy is set at 80% coinsurance)
You only purchased 50% of the insured value so your claim check will be reduced by 50%
In the example above there is a small fire and the damages are $55,000
Instead of a claim check for $55,000 minus your deductible, you would receive a claim check of $55,000 x 50%
So you would only receive a check for $27,500
And the remaining repair bill would be out of your pocket
All Property Insurance policies have a coinsurance penalty so take a look at your policy now
What does Commercial Property Cover?
There are three different types of policy coverage:
- Basic Form Policy: it covers standard natural disasters, fires, smoke, vandalism, and theft.
- Broad Form Policy: it covers everything that basic form coverage does as well as protection from falling objects, the weight of snow or ice, water damage, and collapsing structures.
- Special Form Policy: it covers everything that is not specifically excluded.
Where can we write new commercial property insurance policies?
At this time most of Louisiana is open to low rates on property insurance
Some underwriters will review your current renewal offer and give a credit of 25% off of your current rate
New Orleans, Metairie, Kenner and all of Jefferson Parish is open
Coastal limitations do apply to properties outside of the protected levee zone such as Lafitte and Grand Isle
How much does commercial property insurance cost?
It does depend on the construction but simple math is the property rate times $100 of property value
The underwriter may determine .80 or .90 or 1.00 per $100 of insured value
A 500,000 building with a .65 rate would be $3,250 per year for building property insurance
Zip codes and other underwriting factors above will determine the rate
If would like to compare your current rate with one of our companies writing new policies in Louisiana