By: John Linehan, Program Underwriter
A building limit is the amount of money that Brownstone Insurance will pay up to in the event of a loss. The amount should be a reflection of how much it would take to rebuild the property in the event of a total loss. Getting an appraisal of your property is a very useful tool when determining building limits.
It is important to remember when choosing your building limit that with our outstanding “all-in” policies that you should include the costs to rebuild the interior of your units as well. Think about what it would cost to replace floors, walls, ceilings and fixtures inside the individual units. Keep in mind that the building limit is not what the sale price of the property would be, but the cost to rebuild.
The way we look at the building limit of a property is in price per square foot. We divide the square feet of the property (units and common areas) and divide it by the building limit that is chosen by the customer. This comes out to a number that is the price per square foot. The minimum price per square foot that we can write is 200 dollars per square foot for brick buildings and 160 dollars per square foot for wooden buildings.
We recommend that you choose a building limit above these minimums so that in the event of a complete loss the building can be completely replaced. If improvements are made to a building, it may be wise to increase the building limit which can be done at any time. This protects the investment that you have made into your property.
Our team of underwriters have a vast knowledge of the Boston area and beyond so they have an idea of around where your building limit should be and the amount others like you are using for their building limit values. Please feel free to ask their opinions on the amount of coverage that should be purchased on a property.