Texas weather can be wild! It seems like we move from the dead of winter to the "Spring Hail" Season almost instantly. It is incredible how quickly the convective storms spring up along the Red River and in the Panhandle as the calendar turns to March.
Let me tell you about Ted. He owns a preschool in Waco. He was reading just last week about how Texas insurance policies have changed over the last few years as the severe hailstorms have increased in frequency. He is now worried that his preschool might not have the right coverage for hail damage.
Hail events can cause a lot of problems for businesses. And some of those problems aren't just repair costs for damage. We all know the insurance premiums are going up, and insurance coverage rules are changing. But Ted doesn't want to miss something. Is his business ready? Is yours?
What are the three key things about business insurance before the spring storm/hail season comes to Texas? You and Ted deserve some answers.
Most businesses who rent space don't think they need to worry about hail coverage. But guess what? You do have concerns.
If your landlord has put provisions in your lease that make you responsible for damage to property that you are occupying, that means you could be on the hook for repairing or replacing the HVAC unit or other items.
You also need to be worried about the storm damaging your business' equipment and finish outs. If the hail was to break a skylight or window and rain forces its way into your space, a hail damage claim can help you replace or repair quickly so that you can get back to business.
So, what can you do? You can get a Business Owners Policy (BOP). This type of commercial insurance policy will give you coverage in the following ways.
Even though Ted rents his preschool space, he needs to protect his equipment and the money he could lose if he has to close because of hail. Now that you know to consider hail insurance even if you rent your business space, let's talk about another important part of your insurance: your deductible.
Most business owners like Ted know that they have a deductible on their commercial property insurance. That is not news to anyone. What caught Ted by surprise is that his preschool has a separate deductible for wind and hail.
This has become a norm for the insurance industry in Texas. Your wind and hail deductible is the amount of money you pay before your insurance company starts paying for a covered claim due to wind and hail damage.
It’s super important to know how much your deductible is for a hail storm. Ted is worried. He knows a large deductible might be too much for his preschool to handle after a hailstorm. He also is aware that insurance providers have been changing the rules. It is not uncommon to see a 5% hail deductible on commercial property in Texas.
If your hail deductible is really high, such as the percentage deductible of 5% of the building value, there are options! You can get a deductible buy-down policy. As the name implies, this lowers the amount you have to pay. Severe weather events produce substantial hail losses, and knowing your total cost of risk in those situations is important!
Now that you know about deductibles, let's talk about a replacement cost policy. Not all insurance policies are created equal. The insurance companies are always looking for ways to pay a business owner less money for a hail damage claim. Shifting the cost of repairs to the business using actual cash value provisions on the policy has become commonplace.
There are two different ways to settle insurance claim damage that comes from severe hailstorms.
• Replacement cost coverage: This pays the full cost to replace something after the deductible has been paid, without subtracting for how old it is at the time of the claim.
• Actual cash value: This only pays what something is worth now less the deductible, after subtracting for how old it is.
Replacement cost coverage is super important! It helps pay to replace damaged stuff with new stuff.
Actual cash value isn't ideal, especially if you have big ticket expenses that can be harmed by extreme weather events. After the deductible is subtracted and the depreciation is applied to your hail claim, there won't be much money left to replace your stuff.
Ted knows that he needs to make sure his policy provides robust coverage for any hail damage claims that he may have to file. Working with an experienced commercial insurance agent allows him to keep his business up and running without additional costs making his life harder.
True Texas Insurance is the promise of the agents at Insurance For Texans. If you are like Ted and run a preschool in Waco, or some other business in other parts of the state it is important to be protected from the crazy weather patterns that roll across our state.
True Texas Insurance will have your back when you are on your back. Our agents know all about the special insurance needs of Texas businesses, and they can find solutions that work for you. With True Texas Insurance, Ted can rest easy knowing his preschool is well-protected.
Ready to make sure your business is protected? Click the button below to get started with securing protection from hail damage!