Commercial Property Insurance in Orlando for Loss of Revenues
Within the US there are office buildings, shopping centers and residential properties with either partial or complete vacancies, many of which have been in existence for some time. Tenants, unable to pay, may eventually default on their leases forcing landlords to shut their doors. As part of their overall risk management strategy, its important to understand how this will impact, not only their renewal pricing, but also coverage on the building.
The vacancy issue is significant and many insureds are not aware that their commercial property insurance in Orlando can be affected when a building is left vacant for any extended period of time. Underwriters, fearing certain risks, are not excited about extending coverage to a building that is vacant or unoccupied. Insurance companies typically consider buildings to be vacant if less than 30% of the building is occupied.
Maintaining a secured property can help you save money
Many underwriters will agree to waive the vacancy provision if they receive assurance the building is properly secured. The best way to prevent a vacant building from being vandalized is to have a good security system in place, via hardwired alarm monitoring, security patrols and cameras where such measures are appropriate. Insurance companies often suffer claims due to a list of exposures resulting in losses due to vandalism, where copper wiring, equipment and interior materials may be stolen for profit.
Many property insurance policies will convert to Actual Cash Value (ACV) and/or may reduce the coverage provided for buildings that are vacant over a certain number of days. It is important that owners are communicating with their brokers if a building is unoccupied so the broker can negotiate an extension or get the underwriter to agree to waive the vacancy provision.
One issue for landlords is that they are continuing to pay the mortgage and maintenance on a property with little or no revenue stream. The property might be fully or partially occupied at the moment, but there could be concerns about retailers or tenants continuing to stay on. This is why commercial property insurance in Orlando is so vital. Insurance carriers typically pay loss of rental income based on historical rental income. It is recommended that landlords look at these values annually and make any necessary adjustments as appropriate.