Commercial insurance policy

[Paula M.]

Hello,

We are considering a commercial policy for our properties (only 10 SFHs). New to this process and need help understanding the valuation amounts. Agent says I don't have to insure for replacement cost if I don't wish to. Is this wise? If this is an established practice, then how do I derive a valuation figure? How much invested or mortgaged? Any clarity on subject would be greatly appreciated.

Thanks in advance,

Paula

[David Walkotten]

In my case, I insured 90k properties for just above our cost basis, around 50k. Replacement would probably be ~140k.
To be worth the higher risk and ins premium savings , you will probably want a decent spread between replacement cost and how much you choose for ACV. Maybe 50%?