Devastating floods in Houston, raging fires in California. It seems like the number of natural disasters is increasing in our country. Of course, preventing loss of life is job number one. However, once you, your loved ones, and employees are safe, many entrepreneurs are faced with the very challenging task of dealing with property damage to one's office space or, in cases of larger businesses, the entire office building. How can you be best prepared to navigate the system?
According to a recent report, real estate that is at fire risk in Southern California alone is valued at $5 billion. This area of the country is under high watch given the massive fires that are spreading across areas, but no matter where you may be based, it's important now more than ever to be informed and prepared so your office property and assets can be protected.
Real estate investor, adviser, and author Andy Dane Carter has a variety of insights into this area. He suggests doing these three main things:
1. Ensure Replacement Cost or Actual Cash Value. It is important to ensure any property for at least 80 percent of its replacement value. "Actual cash value is the amount it would take to repair or replace damage to your property after depreciation. For example, I had a development project burn down in Los Angeles county. The insurance company wanted to pay us only the minimum, but because we had an additional policy we were able to rebuild more quickly," Carter told me.
2. Read Your Policy Carefully. Naturally, a property insurance policy is a legal contract. It is written so that your rights and responsibilities, as well as those of the insurance company, are clearly stated. "I can't stress this enough! If you don't understand what is written, ask questions and make sure you have an attorney review it so that you are well-protected in the future," says Carter.
3. Review Your Home Insurance Needs Every Year. Of course, many entrepreneurs have home offices, both large and small. So Carter suggests checking with your insurance agent at least once a year to make sure your policy provides adequate coverage. Carter adds, "The addition of a room, new insulation, or remodeling add value to your property and, therefore, may increase replacement cost. Many people forget to do this, and it's very, very important."
It's important to take care of your assets as you work to build a legacy for your family. Make sure that you are well-armed with the right information and expertise.