Construction and Demolition Chaos

by Jennifer A. Kolbasinski

It’s not easy to keep track of the buildings in your district and it’s even harder to stay on top of it all when buildings are being demolished in one location and renovated or expanded in another. How are these buildings covered? When do you report the changes?

Construction usually starts with an entire or partial move out of the building. Once vacancy is achieved, it is important to know that the Fund is not liable for loss occurring while a building is vacant beyond 90 consecutive days and/or under contract of others. A building is vacant when it “does not contain enough contents to conduct customary operations.”

So what can you do?

In the case of a building scheduled for demolition, but vacant for longer than 90 days prior to tear down, it can be placed on Stated Value coverage at zero value. This move satisfies the coverage restraints on your Replacement Cost Value (RCV) schedule while also providing general liability on the building until demolition begins.

For buildings that have been vacated in anticipation of a remodel or expansion, you have 90 days of continued coverage. Once construction begins, a builder’s risk policy should be in place. When construction is complete, be sure to notify us so that the building can be added to your coverage. Any changes to the building in value, quality, size, and purpose will be discussed to determine how to place the building on the schedule. 

Of course, with newly constructed buildings, you should notify us as soon as the building is issued a Certificate of Substantial Completion.

Each year during renewal, Underwriting sends a form to complete indicating any changes to existing buildings and their occupancy. This Building Usage Change Form is used to determine the coverages available on each building. Take the time to review your property schedule at this point and let us know of any changes to your buildings. Usage changes also affect the contents required for each building. For example, the contents can be reduced and vice versa if a building is repurposed from a High School to an Elementary School.

Your coverage with the Fund comes with many benefits. Program Administration/Property Appraisal Services is here to provide you the information you need to feel comfortable knowing that your properties are correctly identified and adequately valued and covered. When in doubt, do not hesitate to contact us. Our job is to make your job easier! 

If you are undergoing construction, give us a call so we can make sure your properties are correctly reflected on your schedule. Please call us at 800.482.7276, ext. 6152