VRSA is proud to provide the broadest coverages tailored to meet a wide variety of exposures to loss. Our property coverage is designed to protect member buildings and structures, contents, and equipment and return members to their pre-loss position as soon as possible.
When evaluating your property coverage, there are five things you should consider to ensure you have proper coverage.
1. Verify that owned or leased property is scheduled
Also consider other structures that should be covered including bridges, playgrounds, wells, signs, and lighting.
It is also important to schedule owned equipment and miscellaneous property over $10,000. For items under $10,000, you may use a blanket limit rather than individually scheduling each item. (A threshold other than $10,000 can be requested.)
VRSA provides blanket coverage with all property policies. This protects all covered property under the total blanket limit, rather than specific limits, to prevent potential coverage gaps.
Most carriers do not provide coverage for items not scheduled. VRSA provides a $1,000,000 unscheduled property (or “oops”) limit for inadvertent omissions.
2. Understand the value of your property
VRSA offers replacement cost coverage on all buildings and equipment. This ensures that in the event of a covered loss, you will receive the amount to replace that building/equipment at today’s price.
To ensure your buildings are adequately covered, they must be properly valued. Otherwise, you risk undervalued blanket limits.
Luckily, VRSA contracts for independent, licensed property appraisers to evaluate all member locations valued at more than $1 million on a five-year basis, at no charge. This appraisal process not only helps to make sure values are realistic with today’s construction costs but also helps identify buildings and structures to be added or removed from the list of scheduled items.
3. Report new construction or major renovations
Notify your coverage specialist as soon as new construction or major renovation projects are considered. We recommend that contractors carry builders’ risk insurance for these projects. These policies are generally broader and designed for larger projects.
For example, these policies include not just the cost of the project but the cost of the contractor’s equipment and tools and can be written to cover soft costs that result from construction delays. They can be written on a per-project or portfolio basis. These policies protect the general contractor, the owner, and all subcontractors as named insureds under one policy.
VRSA provides contract review and can review insurance requirements in your request for proposal (RFP) as well as those provided/required by the contractor.
If you have questions on builder’s risk, contact your VRSA coverage specialist.
4. Check limits for important coverage extensions
Property policies have several added coverages. The subcoverages that produce the most, or most expensive, claims are extra expense, flood, and earthquake.
Extra expense covers the extra expenses related to a covered claim, such as rent on temporary replacement buildings and overtime expenses necessary for manual labor to offset broken equipment. VRSA provides $1,000,000 limits on extra expense to all members purchasing property. Higher limits are available.
VRSA also provides $1,000,000 on flood and earthquake at no additional charge. Higher limits are available.
5. Review the ability and willingness to pay claims
It is good to know your providers’ average claims response time, as well as the percentage of the property claims paid versus those filed.
A promise to pay can be nothing more than a false promise if there is no money or intention to pay claims. Our audited financials, annual report, and capital adequacy study are available on our website.
For more information, please contact your coverage specialist.