The real construction cost that the insurance companies don’t disclose… when you find out it may be too LATE!

Most business owners, don’t understand the difference between Market value, new construction and replacement cost. There is a difference between new construction and reconstruction. What can you do to make sure your business or commercial building is adequately covered in the event of a loss? Find out what the real construction cost is before disaster strikes.

Should fire, flood or any natural disaster strike your business or commercial building your real construction cost should be defined by a qualified accredited appraiser that is a construction expert as well as a 2008-2009 USPAP compliant appraiser.

• Market Value for your building is defined as “the value that a willing buyer and a willing seller will exchange the property for in an open non-distressed sale”. This does not apply to the real construction cost that it will take to replace your destroyed business building.
• New Construction cost will cover just the building, no demolition or landscape cost.
• Replacement Cost is vague in definition and had a maximum that the insurance would pay as of the date of the contract. No consideration was given to the real construction cost. Replacement Cost will fall short of your needed rebuilding funds.
• If your building has been damaged or destroyed by disaster you will need a demolition team to remove and dispose of the debris before new construction can start. This cost usually is not included in your “replacement cost” insurance.
  Before you start construction you are in a negative balance to rebuild your business building according to your present insurance policy.
• WHAT IF THERE IS NOT ENOUGH MONEY TO REBUILD? Can I just take the insurance money? Yes you may take the Cash Value of your building replacement insurance… but, there is usually a hidden clause to only pay you half the insured amount!
• Real construction cost have been refined since 9-11. This national disaster eventually raised all insurance rates because of the magnitude of loss and the lack of real construction cost factored into the insurance policies. Real construction cost is the only answer to restoring your business and the building.

Contact Paul Fussell Valuation for a real construction cost appraisal.

• Accredited Senior Professional Appraiser - N.A.P.A.
• 2008-2009 USPAP Compliant
• Graduate of Architectural Drafting and Design
• 29 years Licensed Commercial Contractor
• Phone 480 326 3907

Real Construction Cost

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Appraiser for rebuilding cost of your business building is needed now before disaster strikes leaving your business at risk. In addition to typical risks of theft and fire, natural disaster risks that can cripple any type of business prevail. It is essential that business owners have their buildings appraised by an accredited appraiser that is compliant with the new 2008 USPAP laws and then update their policies often to include improvements, major purchases and increased building costs, according to the Insurance Information Institute (I.I.I.).

Official Asset Appraisers have found that most business owners don’t have the right type of insurance and have vague gaps in their coverage. As a Business owner you should ask yourself these questions;
1. Do we have the right kind of insurance to rebuild our building and replace all of our equipment and personal property? (Your Business Personal Property includes these categories:

• Furniture and Fixtures,
• Equipment, machines, computers,
• Inventory: raw materials, merchandise, work in-progress,
• Personal property of your employees,

* If you or a tenant have made improvements on the building, were the improvement values added to the policy?)

2. What is the real construction cost and replacement of my equipment, if I had a total loss today?

3. If I as a business owner do not have enough insurance on my business building to rebuild and continue my business, what are my options?

• Borrow,
• Build smaller,
• Take the insurance money and quit the business.***

***If you are under insured by 1/2 (or any percentage) and decide to not rebuild, the insurance company can arbitrarily decide that the cash value you receive is not the insured amount, BUT, 1/2 (or any percentage) the amount your building is under insured!

4. If my business had a disaster does my insurance policy provide for demolition and clean up? Is this paid out of the general rebuild fund? NO! Demolition and clean up is usually not addressed in the insurance policy! Therefore YOU pay for the clean up and disposal of the demolished building out of your pocket.

5. If I have replacement cost insurance, doesn’t that cover all I will need? NO! NO! NO!

Solution:
Get an accredited USPAP compliant appraiser to find out what the real construction cost of your business building will be today! Have Official Asset Appraisers appraise for the total amount to open your doors and continue business after a disaster so that you can adjust your insurance coverage. A desktop appraisal or “guesstimate” of square footage price is a tremendous risk. Only an experienced appraiser that can certify your appraisal should be used for this task. Official Asset Appraisers have 29 years experience as Commercial General Contractor, Graduate of Drafting and Engineering and appraisals. These qualifications will insure that you can circumvent the problem of SURPRISE! … “You have a disaster AND you don’t have the building insured for enough to rebuild!” … Every type of appraisals can be accomplished by Official Asset Appraisers! If you have questions, give us a call.

Phone 480 326 3907.

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