Commercial property can be a great investment. There’s always a market for businesses of all kinds that need to rent space, providing you with a steady income stream that helps your investments continually grow in size. Add in the fact that real estate tends to go up in value, not down, and you have some solid buildings to add to your overall portfolio.
However, real estate investing, especially in commercial properties, comes with some risks, including physical damage due to fires, floods, and windstorms. Standard insurance policies can cover some of the costs of repairs, but there’s another type that you need to know about: ordinance or law insurance.
What is Ordinance or Law Insurance?
Standard property insurance consists of a general policy that covers physical damage to the building and its grounds, as well as liability insurance that provides monetary assistance should you or your property investment company be found liable for injuries or other things that occur on the grounds. It doesn’t usually include ordinance or law insurance, which can be useful in a number of circumstances. These policies are designed to help you rebuild or update the building, when necessary, based on the laws and codes regarding habitable buildings in your area.
The Cost of Demolition
When a building is damaged to the point that it can no longer be fixed, it’s time for demolition. No matter what caused the damage, from a hurricane to a fire, it’s important to hire professionals so that the structure can be carefully taken down without anyone getting hurt. This can be expensive, so it’s a good idea to have ordinance of law insurance to help with those costs.
Rebuilding the Structure
Once the building has been demolished, it’s time to rebuild. You can choose from carefully recreating the structure, especially if it’s in a historic district, or from going in a different direction entirely, as long as you’ve cleared the changes with the local government and are prepared to meet all building codes. Your ordinance or law insurance can help foot the costs since you’ll be creating a new and updated building that may cost more than you have the original building insured for.
Paying for Updates to the Property
Another thing that you could do is update the property in order to have it meet local building codes. This may not change the exterior, and should instead focus on ensuring that everything from the wiring to the roof is properly updated. These crucial updates make the building habitable, leading to happy tenants and an agreeable local government. Thankfully, your ordinance or law insurance can help with all of those costs as well.
Have Questions? Contact Charlotte Insurance
Want to learn more about ordinance of law insurance for your commercial investment properties? Contact Charlotte Insurance. Our agents can explore and explain all available options and put together the insurance coverage plan your business needs.