business property, acv or replacement coverage

Running your own business requires making a lot of decisions; however, when you are deciding on the best settlement coverage for your business property, the decision is HUGE.  There are many variables when deciding how to protect your business property.  Does your business property need ACV coverage or replacement coverage? Let’s take a look at an example.

Both Sue and Bob own separate restaurants that basically have similar menus, the same type of customers, and are located in a similar type of building.  However, Bob’s restaurant is located in an older neighborhood where many of the buildings in the shopping center are now vacant. Sue’s building is located in a very centrally located area and she loves the location!  Unfortunately, a fire destroys both restaurants and it is settlement time!  Sue has replacement cost coverage while Bob has actual cash value (ACV) coverage.

Is One Coverage Better Than the Other, and How Do You Decide Which is Right for YOU and Your Business?

There are many factors involved in determining what type of settlement coverage is right for you and your business, so it is important you contact your independent insurance agent to make sure you have the most suitable and affordable coverage for you!

With replacement cost coverage, reimbursement is for the cost to rebuild your business at the existing location or at a new location, with the same type of materials on your business building.  So, in the above situation, Sue will rebuild her business and most likely stay in her current location; but may choose to build elsewhere.

With ACV (actual cash value) coverage, the claim payment is for the cost to replace the building minus depreciation of the building, and is generally a less expensive option. For example, Bob, the restaurant owner, may choose to use his claim payment to purchase a similar type of building, but in a more prosperous location.

What’s Right for One May Not Be Right for the Next!

For both of these scenarios, the right settlement coverage appears to be properly suited for each of these restaurant owners.  When deciding which is right for you, it is important to be informed of your options.  Call your independent agency NOW so you will KNOW whether your business is more suited for replacement cost coverage or ACV coverage.

Paramount insurance agency is an independent insurance agency that can provide you with all the needed coverage information that best fits your needs as a business owner.  Contact us TODAY at 866-869-3335 so that you won’t get burned!