This is how you get full compensation for property damage


Jun 2021

Important insurances at for real estate

The risks involved in operating real estate require specific areas of concern. Often, crucial components that can make the difference between full claims payments or not go unnoticed.

The following 3 points can ensure full payment in the event of a claim.

1. Loss of rent 

A tenant is exempted from paying rent when the damage to a property is such that the property becomes uninhabitable. The property owner thus loses rental income. Loss of rent is covered by most insurers up to a maximum of one year.

It takes an average of 9 months to build a standard home. To this is added the time for permit application, tendering and clearance of the remains. For more complex properties, such as high-rise buildings or a listed building, the standard rental loss period is not sufficient.

It is important that the period of loss of rent be appropriate to the property so that lost rental income is fully compensated. 

2. Destinations function 

A claim may be (partially) rejected if a change in the nature of the business or the purpose (production, storage, catering and the like) of the building has not been reported. It is therefore important to check whether the description on the policy corresponds to the actual situation and to report changes within 2 months.

Was a property previously leased to a sandwich store, but now to a wok restaurant? This change increases the likelihood of damages, which you obviously want to get paid in full. 

3. Guarantee against underinsurance 

When an appraisal report has been performed for reinstatement value, most insurers provide a 6-year underinsurance guarantee. The insurer then guarantees that the actual damage will be compensated. After this period, if the insured amount is wrong, the additional repair or rebuilding costs will be borne by the owner.

Make sure the rebuilding value matches the actual rebuilding cost. For a warranty, the appraisal report should not be older than 6 years. 

Customized insurance solutions

If any of these points are not met, there is a chance that the damage will be (partially) for your own account. It is important to have a customized insurance solution prepared by a specialist and to communicate changes on time. 

Brickbase specializes in property insurance and helps clients review current terms and clauses. Still have a claim that has not been properly handled? Our experts are ready to perform a second opinion regarding the settlement of the claim. 

Wondering what Base Insurance can do for you? Book a free 30-minute second opinion.

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