Do you own a business? Do you have a policy with Co-Insurance? I’m sure when you were speaking with your insurance agent you told them you wanted to keep your premiums low right? Any smart business owner would want to cut costs and that is understandable but many don’t realize the potential for disaster if you actually have to file a claim.
So What is Co-Insurance?
Generally speaking, this sneaky little clause applies to commercial property or business property and requires that you – the business investor or owner – insure the company property up to a certain percent (typically 80% of the property value) or risk paying a penalty on a claim. Paying such a penalty can be a very disappointing experience because it will usually occur at a time when you really cannot afford it. Accidents and losses are never welcomed experiences – especially in a business environment where time is money and assets are essential to future production.
Consider an example:
If your Co-Insurance clause states 80% then you are required to have proper business insurance coverage up to that percentage limit. If you do not, then the insurance company will not necessarily cover your loss.
Business Property Value: $300,000
Co-Insurance Statement: 80%
Actual Insurance Coverage: $200,000
Since the clause in this example requires eighty percent, then you would need at least $240,000 of coverage or 80% of your actual business or property value. Since you do not have the full coverage required, you stand to pay a penalty in an insurance loss or accident. Because this will surprise most business ownership teams, it’s important to look into your co-insurance contract immediately.
Most small business professionals (and even the self employed) do not know about the power of the Co-Insurance clause. Don’t be left out in the cold when an unexpected event occurs in your business that could negatively affect your livelihood. Having proper insurance coverage is an essential part of your success in the business world and you never know when something is going to happen.
Dealing with a claim when you have a co-insurance clause can be quite a hassle especially when you are under insured. The cost of being underpaid due to penalties far outweighs the cost of utilizing the services of a Licensed Public Adjuster to represent you. Just like any business, keeping costs down is a must and unfortunately the insurance company is in the business to collect premiums, not pay claims. Knowing when its time to hire a public adjuster is key to being payed what your claim is worth and in making your recovery as painless as possible.
To learn more call 1-866-450-8520. Here at RHI Claims Specialist, Inc. our experienced staff are ready to assist you with any questions you may have regarding your policy or claim.