By H. Gerald Grinter
Usually, when you hear these words, Real Estate doesn't comes to mind. Well, I hate to disappoint you, but I'm going to take you in a different direction. I'm going to take you to a place only someone in insurance can take you.
We all know that where you purchase property makes all the difference in the purchase price. Well, the same holds true in calculating the replacement value from a commercial property insurance point of view as well. But did you know the types of tenants you'll have make a difference as well?
You guessed it. A strip-mall with a night-club, a biker bar and a gun shop may cost you more to insure than one with a dry cleaners and other family friendly businesses. So, location does matter.
The same holds true for an apartment building with commercial space. Who occupies this spot can make a big difference. Certain types of businesses may not be an acceptable risk according to some insurance company underwriters. While some insurance companies may just rate this exposure at a higher cost, some my flat-out deny you coverage.
Now, if we look deeper into this concept the other surrounding businesses play a role in the cost of your coverage as well. The business complex with a haz-mat and dynamite manufacturing company next door may not fly with some insurance carriers.
Location matters. Not only for the price, but how and where you insure your new investment.
This is where working with an independent agent can really pay off. Because, usually they have access to several carriers who can research, rate and probably cover whatever comes your way. Here's another little known secret. Sometimes, when you purchase property such as a hotel or other commercial real estate, some insurance carriers may allow you to simply re-write the commercial insurance property coverage to confirm and document you as the new owner. So, before you run out and look for a new broker to work with, meet and greet the current one. If you like them, depending on the location and risk exposure, it just might pay to stick with the girl or boy who came with you to the dance
In the end location, location, location does matter. From what you pay for your investment to how you insure it. As the savvy investor I know you are. I'm sure the next time you are looking to add to your cache of investment properties you'll look to the right and to the left and at what's inside before you sign on the dotted line. Until next time, be well.
If you have any questions or would like me to review your coverage please send me an email to gerald@geraldgrinter.com or call me directly at 206.650.4342
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