There are some important considerations to take into account when shopping for commercial property insurance. Commercial property insurance rates and coverages can vary significantly from one insurer and policy to another. It pays to shop around. The following tips can help you save money or avoid other pitfalls when buying a commercial property policy:
- Minimize all possible risks before applying for coverage. Examine your business premises and operations carefully for things that could contribute to the likelihood of an insurance claim. Improving employee safety, security, and inventory management can reduce the amount you pay for commercial property insurance and other types of coverage, such as workers’ compensation and general liability insurance. Most insurers also offer loss-control or risk-reduction services. Contact your agent or insurer for help identifying and eliminating potential risks.
- Get quotes from several companies. When comparing prices, make sure you’re comparing policies with similar coverage. A cheaper policy might also provide less coverage.
- Keep shopping if an insurer declines to cover your business. Insurers have different underwriting criteria. If one company turns you down or is too expensive, another may be willing to issue coverage or offer a lower premium.
- Consider higher deductibles. Almost all commercial property policies have a “deductible,” which is the amount you must pay toward the cost of a claim before the insurer will pay. The higher your policy’s deductible, the lower your premium should be. Keep in mind, however, that you’ll have to pay more out of pocket if you have a claim. Your policy will also have a “policy limit,” which is the maximum amount the insurer will pay for any covered loss.
- Verify your agent’s and insurer’s licenses. Agents and insurers must be licensed to sell commercial property insurance in Texas. An unlicensed insurer may not meet the state’s minimum financial and regulatory requirements, meaning the company may not have the financial resources to pay your claim.
Authored by Texas Department of Insurance
