As the owner of a tenanted building, you likely have a lot on your plate. You need to deal with renters, manage building maintenance, and keep up to date with law changes and regulation adjustments. Besides this, the bills incurred by renting and managing a building are growing steadily – you’ve likely noticed this yourself, particularly when it comes to building insurance premiums. Building insurance is a necessary expense, but the costs encountered in taking out this protection can be very difficult to fork out.
Why Are Building Insurance Premiums on the Up?
There is noticeable surging inflation when it comes to the costs of building materials and this could result in homes and commercial buildings falling into the category of the underinsured as out-of-date policies don’t cover the rising costs. Just as one example, the costs of cement shops up by 15 percent in just one year, between the summer of 2021 and the summer of 2022. Imported wood jumped up in price too, rising by 24 percent in the same period of time, with structural steel suffering a similar increase with a rise of 46 percent. This is just one increase that has been seen in the chain of events, as soaring global energy prices and disruption in the global supply chain spur the rising costs of building materials. Sanctions on Russia following its invasion of Ukraine have limited the supplies of Russia’s major exports, materials like iron, wood, aluminum, and copper.
Just one small pebble dropped in the waters of the financial market and the ripples reach far and wide. The ongoing situation will likely result in insurance policies that are not adequate to meet the costs of fulfilling claims made against them. With the rising likelihood of natural disasters and extreme weather conditions, not only are the costs of rebuilding going up, but the chance of needing to file a claim is going up too.
To keep up with the costs, it’s only logical to conclude that building insurance premiums need to go up.
How Can You Keep Insurance Premiums Down?
Fortunately, there are things that homeowners can do to lower the costs of building insurance. You don’t have to be a sitting duck as prices go up. Here are just a few to consider:
- Take the initiative. Look out for potential problems that could result in an insurance claim before they develop to the point of needing to0. Put the effort in when it comes to education and maintenance so that tenants know what to do to prevent an issue from escalating.
- Do you research. Don’t just settle for the renewal quote that automatically comes through every year. Shop around and look for cheaper options whenever you can.
- Keep evaluating. Try and schedule re-evaluations of the property to ensure that it doesn’t slip into underinsured. Make sure that the current value of the property matches that on claimed on the policy otherwise you’ll end up in a predicament if it becomes necessary to make a claim.
- Try a higher excess. If you’ve got the funds on hand for when the need arises, you might opt for a non-standard excess. This means you will pay less for your premium, but you will just need to consider how you will pay the excess in the even that you do need to claim.
With the right advice and support, you can make wise decisions regarding building insurance. Insurance specialists, like Deacon, will be able to offer valuable guidance to help you manage the stormy waters of today’s rising costs.