While the country continues to rebound from the economic issues that sprang up over a decade ago, some property owners are still grappling with issues regarding commercial property foreclosures. Within the US, office buildings, shopping centers and residential properties have become vacant, or have lost revenues due to tenants vacating the premises for some time now. The impact will certainly affect many business owners and result in severe financial losses.
It’s important to understand how this will impact these businesses, not only their renewal pricing, but also regarding the coverage on the building. The vacancy issue is certainly significant, and many insureds are unaware that their Orlando commercial property insurance coverage can be affected if a building is left vacant for a long period of time.
In general, underwriters have concerns about extending coverage to any building that is vacant or left unoccupied. Insurance companies typically consider buildings to be vacant whenever less than 30% of the building is occupied.
Maintaining a secured property is advised
Many underwriters will often agree to waive the vacancy provision provided they receive assurance from the owner that the building is properly secured. This includes having a functional alarm system, as well as security patrols and/or cameras to properly monitor the building. Insurance companies often suffer claims due to vandalism by thieves attempting to scour for copper wiring, equipment and other valuable interior materials left on the premises.
The best way to prevent being vandalized is to have a good security system in place and also notify the broker immediately when any properties owned are on the brink of becoming vacant (many property insurance policies will convert to Actual Cash Value and/or reduce the coverage provided for buildings that are vacant over a certain number of days). It’s important that owners are communicating with their brokers whenever a building is unoccupied so that the broker can negotiate an extension or get the underwriter to agree to waive the vacancy provision.
While the property might be fully or partially occupied at the moment there could still be concerns about retailers or tenants vacating under the strain of their own current economic situation. Commercial property insurance in Orlando will aid building owners provided they have coverage in place for vacant buildings in the event that damages are incurred due to vandalism or other related exposures.