Insurance providers offset high and frequent claims by raising premiums. In this article we look at how a pattern of consistent building maintenance and restoration helps secure the best coverage for insurance savings.
Why building restoration reduces insurance costs
The premiums collected by insurance companies create a pool of funds that cover the costs of claims. Each file claimed increases an insurance company’s financial liabilities. The more files claimed, and the more serious the damage, the higher those liabilities become. Insurance companies respond by increasing their premiums to cover their costs. Clients that increase liabilities pay higher premiums to help offset the insurer’s costs. Those with fewer claims are rewarded with lower premiums as an incentive to continue maintaining their properties.
The property insurance claims process
Insurance policies don’t cover property damage and liabilities caused by property owner negligence. Insurance companies check maintenance records and claims history to establish a pattern of neglect, if there’s such. Property owners can avoid claims denial with fewer claims and improved maintenance.
Building restoration, maintenance, and duty of care
Property owners have a duty of care to keep the building in safe condition and comply with building codes. A building maintenance and restoration plan delivers that duty of care, including:
- Regularly maintaining balconies and railings to prevent accidents and reduce the risk of liabilities
- Maintaining concrete walkways, stairs, and garage surfaces to reduce the risk of water infiltration and trips and falls
- Preventive maintenance plans that avoid costly emergencies such as leaking roofs, windows, and doors that damage building interiors
- Restoration that extends the life of building assets and avoids deferrals that lead to increasingly costly, risky damage
- Ongoing inspections and assessments to ensure the building is compliant with current building code, fire, and safety regulations
Insurance savings through building restoration
Taking a preventive approach to building restoration and maintenance provides several insurance benefits, including:
Decreased claims
Well-maintained buildings mitigate the risk of costly water damage related to issues such as deteriorating seals and caulking, failing windows, damaged masonry and cladding, etc.
Decreased severity of damage
A sound building envelope decreases the severity of damage, which decreases the costs incurred by the insurance company. Property owners avoid major premium increases when the costs of the claims are lower.
Decreased liability
Poorly maintained properties increase the risk of slip and fall claims and more serious claims related to faulty balcony railings or high-rise windows. Ongoing maintenance reduces risks and in turn keeps premiums lower.
Improved compliance
Building maintenance and restoration help avoid unintentional building and fire code violations that raise red flags for insurance companies. Compliant properties are safer and less risky.
Building maintenance records improve insurance terms
Documentation of building inspections, maintenance work/repairs, and restorations provides a pattern of consistent property care. Building owners who maintain proper records can easily prove their commitment to risk management using these tips:
- Standardize the record-keeping process with photos, receipts, inspection findings, and dates
- Create a template that makes it easy to record projects
- Provide records of restoration work to the insurance company to take advantage of potential savings
- Perform standardized annual assessments and inspections
Property owners that defer restorations and ignore basic property maintenance requirements face higher premiums and risk insurance non-renewal. At WellDone Inc., we provide building restoration and preventive maintenance plans to help reduce insurance deductibles and premiums and enhance coverage options.
Contact our team today to discuss how our building improvement services can help reduce insurance premiums for your commercial and multi-unit residential buildings in the GTA.