Budgeting for and Adding a New Building to Property Coverage
by Jennifer A. Kolbasinski
The attention, excitement, and hard work that is invested into seeing a new building from foundation pour to ribbon cutting takes every ounce of concentration you can muster. Between overseeing the construction, contractors, temporary housing, and your day-to-day job, it’s easy to forget a few little details like budgeting for the new building and adding it to coverage!
A new multi-million dollar high school added to your property coverage is not pocket change. Don’t be caught unprepared and unpleasantly surprised when it comes time to add the building to your coverage or pay your yearly contribution. A few simple tips will allow you to gather the information you need and budget accordingly.
Determining your building value is not always easy but it doesn’t have to be hard. If you can’t find the building cost within your contractor’s proposals, ask your architect or general contractor to provide you with a building cost. Be sure you request the building’s value only. Don’t include permits, fees, land clearing, insurances, and parking/paving. You want to budget for and cover only the building that will be replaced in the event of a loss.
A simple formula will help you determine the estimated contribution on the building and its contents: Building & Contents Value/100 X Rate Per Hundred. This will give you a good idea of your annual contribution for the new building. Don’t know your rate? Contact our Underwriting Division – they’ll be happy to help you.
Builder’s Risk coverage generally expires the day you take possession of the building. You need to be prepared to add the building to coverage as soon as you accept completion. While you do have 90 days after completion to add the building to your schedule, coverage during the 90 days is limited and may not be adequate to cover the cost of the structure.
Adding the building to property coverage is a walk in the park if you’ve gotten this far. Give us a call and let us know the building’s address, date of completion, value, and square footage. It takes just a few minutes and we’ll do the rest. This same information applies to purchased buildings and any building additions you complete.
Remember, once you’ve added your building to your coverage, the building will be scheduled for a formal inspection by our staff appraiser. The value can change at that time and your contribution will be adjusted.
The Program Administration department is here to make your job easier. If you have questions call us at 800.482.7276, ext. 7411.
