Coverage 101 – Why total insurable value in Canada is so important
Every moment counts. When bad things happen, you need insurance that will respond. Let’s say a windstorm damages your commercial property. As soon as you confirm that people are safe, your next call will likely be to the 24/7/365 ALIGNED Insurance Claims Reporting Centre at 1-844-890-3213. The good news is because business insurance is our specialty, you’ll know that total insurable value is built into your commercial property policy. Your coverage is aligned to respond the moment you need it most.
Calculating to total insurable value for your property…
It all adds up. Here’s how total insurable value works. To start with, total insurable value (TIV) is a common property insurance term. TIV specifically refers to the sum of the full replacement cost value or full value of your insured property, business income values and any other insured property.
Typically found in business property policies, total insurable value insures against damage to an organization’s buildings, contents to a covered cause of loss, such as a fire, flood, windstorm etc. It’s also important to note that your commercial property policy may also cover the extra expenses or loss of income that result from your property damage claim.1
How insurers calculate total insurable value…
Your total insurable value (TIV) is calculated by adding up the total value of all property, inventory, tools. equipment, etc. at each insured location.
Then your total insurable value is combined with the final number calculated on your completed business income worksheet. This form is used to estimate your organization’s annual business income for the upcoming 12 month period. Your business income limit of insurance adds together the total sum of all of these amounts.
In the event of a total loss, the selected percent (or multiple) of your estimated annual business income for the next 12 months is based on how long it will take to resume operations and replace all damaged property. Depending upon your organization, this period may extend beyond 12 months. It is also important to note that most Canadian insurance companies require a completed business income worksheet in order to activate the business income agreed value coverage option.2
The formula. Figure out what your total insurable value might be.
Here’s how to roughly calculate your TIV. Let’s say you determine you have $1,000,000 in total insurable value. Then multiply $1,000,000 x $0.4 (Commercial Property Insurance Rate per $100 of TIV). Divide the total by 100 would equal a $4,000 annual premium. Your total insurable value (TIV) is an important number for all commercial property policies. That’s because TIV is typically the number that is applied against the insurance rate and determines your premium.
Across Canada, our brokers are experts in getting coverage ALIGNED for commercial operations. We can help you determine your total insurable value and get the best value and coverage options lined up for your business. When every moment counts, count on ALIGNED to deliver.
Sources: 1,2 ALIGNED Insurance: Is your property’s full value covered?
