CIG Offers Extended RC and Eliminates Coinsurance Penalties for BOPs

September 23, 2013

Capital Insurance Group (CIG), a regional property/casualty insurer serving the Western U.S., is now offering commercial property owners an innovative 125-percent extended replacement coverage and the elimination of potential coinsurance penalties. The two product advancements working in tandem will help mitigate the expenses that the insured commercial property owner may otherwise pay out-of-pocket in the event of a loss.

“We understand the intricacies and complexities of managing a commercial property. CIG is proud to offer insurance solutions that remove obstacles for business owners while protecting their livelihood,” said Ken Stewart, director, CIG Commercial Lines.

The announcements of the newly released insurance endorsements represent significant enhancements to business-owner policies (“BOP”).

125 Percent Extended Replacement Cost

This new coverage automatically provided with all BOP policies for no additional charge provides up to 125 percent of the building coverage limit to repair or replace the damaged building if that’s what it costs to rebuild. While all buildings should be insured to at least their estimated replacement cost, 125 percent extended replacement cost may offset a gap in coverage limits if the estimated replacement cost of insured property is less than the actual cost to rebuild.

Example: If replacement cost is estimated at $100,000, the insurance coverage could pay up to $125,000 to replace the building if that is what it costs to repair or rebuild.

Coinsurance Penalties No Longer Apply

When coinsurance provisions apply, in order for a building owner to collect full coverage on a damaged building, the property must be insured for an estimated replacement cost, within a certain percentage range of the actual cost to replace. This means if replacing the building actually costs more than the estimated value, the insured would then be responsible for the disparity (called a coinsurance penalty). CIG has eliminated these coinsurance provisions from all BOP policies for no additional charge.

Source: Capital Insurance Group

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