Apartments and Dwelling Fires

No one insures more rental buildings in Northern Illinois than us. If you have a multi family rental building or a single family dwelling, our insurance rates for rental properties can’t be beat.

Ways to Insure a Rental Property

Functional Replacement Cost

Over the last few years, this has become the most popular choice for investors. With this coverage, you can usually insure your building for its market value. When you have a claim, the insurance company will pay for TODAY’S building materials—stuff you can purchase at a big box retailer (Home Depot, Menards, etc.). For example, if your building has lathe plaster walls, you receive drywall. Or, if your flooring is hand laid oak boards, you might receive oak laminates. There is no depreciation and you will receive brand new materials, but maybe not the exact materials that were original to your property.

If your building is involved in a total loss (fire for example), it’s important to know that you will receive the insurance amount, or the market value of the dwelling, whichever is LOWER.

Traditional Replacement Cost

With this coverage, you are required to insure your property for the cost of rebuilding an identical structure. When you have a claim, you will receive the EXACT materials that were original to the building. Plaster walls are replaced with plaster walls. Or, individually laid oak flooring is replaced with individually laid oak flooring. If your building is involved in a total loss, you will be paid an amount that is no higher than the insurance limit.

Actual Cash Value

Also referred to as ACV, this coverage depreciates any claim. If you have 20-year-old shingles, you are paid based on the value of 20-year-old shingles. If you have 50-year-old plaster walls, you are paid based on 50-year-old plaster walls. When you have a partial claim (99% of all claims), few people are happy. Some folks end up with $.20 or $.30 per dollar. If you have a total loss, you will receive the insurance amount, or the market value of the property, whichever is LOWER. Since this coverage is so penalizing, it is usually reserved for vacant buildings, properties under construction, or older structures with little market value.

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