When issuing a property insurance policy for a building, what factors are considered during underwriting?

Great answers!

The use of the building is actually an important factor. On standardized insurance model, buildings are rated from very low risk to extremely high risk, respectively 

1) Warehouses (less human interaction) 

2) Small Apartment (One person) 

2) Government Building (only workers, not accessible to the public)  

3) Corporate building (Workers, limited public access) 

4) Business building (store, restaurant, ...etc.) (Workers, Public access) 

5) Hotel (Open to public use, Multiple access points)

6) Religious Buildings (Open to public, other factors) 

7) Cinemas, Concert venues, Sport Arenas (Very Public, low control) 

The list alone is not significant, but we need to match it with electrical usage and type of wiring, material used on the external and so on. Human interaction is also a big factor when considering a building, as human error affect negatively most of the time. 

The list can be adjusted based on current events mostly, and the location or country where it exist. 

From uderwriting point of view for fire various insurance interests, the insurance of building consider as the simple one , hence simply you may consider and pay attention to the following :-

1/ The material of building construction .i.e concrete or otherwise .

2/ Fire precautions installations such as extinguishers ,water hoses........etc

3/ accurate electrical installations should be observed

4/ The distance between the building in question and the neighboring building must be acceptable to be considered as separate risks.

5/ finally the building location.

Thanking you 

As general rule, insurance policy fair reflects the risk exposure that insurer have to face. Risk exposure can be quite intuitevely measured as product between the probability that a claims occurs and its related average cost. This implies that any fact/or policy conditions that can reasonably increse the probability of a claims or its average cost lead to an higher premium.

According to this logic, we can provide a simple example of a Insurance policy on a bulding against natural events. In this case, we would have:

1) PROBABILITY: in this case (and again quite intuitevely) the probability that a claim occurs will be primarly related with geographic area (buildings in Japan or Florida that are exposed respoectevely to hearthquakes and tornados are riskier than a building in central Europe where these events are extremely rare).

2) AVERAGE COST OF CLAIMS: as first, average cost depends on the market value of the building (a skiskreaper is much more expensive to refund rather than an apartment!). Secondary, you have to evaluate any feaures who can limit the cost of the claim. One example is a fire alarm that reduces fire damages; a second example are policy condictions: for example, a covenant who cap the maximum payable amount by the insurer reduces its risk exposure and then the insurance premium.

Any concerns regarding the terms of the insurance policy are:· The value of restoring the building to its previous status.· Neighboring buildings.· Demolition and removal of rubble.· Loss of rent.

Preview the insurance company for the building before concluding the contract

The principle of good faith

See the safety certificate against fire hazards from civil defense

 

Major Factors Are: Geography: This can help your provider determine which environmental risks your business may face, such as flooding, tornadoes, etc. Also, land value and local law can affect what premiums you pay. Size of business premises: A large office or factory building will likely cost a lot more to insure than a single rented room. Safety and security: Is your business located in a high-crime area? Does your business possess toxic materials or engage in dangerous activities like mining? Do you have stringent security measures? These can all affect insurance rates. Age of building: Old buildings can be more susceptible to certain types of damage, so they may cost more to insure. For example, a fire caused by old electrical wiring could translate into costly repairs if the building needs to be rebuilt to code. Type of equipment: Heavy industrial equipment will cost more to insure than an at-home business's sewing machine. Age of equipment: You may pay higher premiums if your equipment is hard to repair because of scarce parts, or if it's more likely to break down because of heavy use. Alternatively, it might be cheaper to repair older equipment than buy state-of-the-art technology. Replacement value vs. actual cash value: Replacement-value coverage costs more because the policy pays out what you need to replace damaged items with brand-new gear. You may have the option of cash-value coverage, which only pays out what the depreciated property is worth. On the bright side, those policies cost less.

I'm not specialist in property insurance

my field mainly in health insurance