Residential vs. Commercial Insurance Claims: Key Difference and Considerations - Performance Adjusting (2024)

Knowing what makes commercial and residential insurance plans different can better prepare property owners for filing claims. Below are several differences between residential and commercial insurance claims.

1. The Listed Policyholder

When submitting an insurance claim, the policyholder will vary depending on the type of plan.

Residential plans often have only individuals or couples listed as the policyholder. These people are typically the home’s residents, trying to protect their homes from various damages and costs. The policyholder on these plans is often straightforward, making it easy to identify and navigate when submitting a claim.

Alternatively, commercial insurance might be more unclear and straightforward about the policyholder. For commercial insurance plans, the policyholders can be individuals, groups or organizations, depending on who owns and is responsible for the business. Commercial insurance claims can get more complicated when filers are unsure of who to list as the policyholder for future contact and payouts.

2. Properties Included Under Plans

Commercial and residential insurance policies often have different expectations about the number of properties included under plans.

Homeowners insurance plans usually only include the residential property, from the building itself to any land included in the deed. Some policies and add-ons might cover unattached structures like sheds, garages and poolhouses. That said, individuals who own multiple homes or residential properties would need to take out separate plans to protect each one.

Under a commercial property insurance policy, policyholders can group multiple business locations under one plan. This system helps business owners manage and protect chains or expanding businesses, simplifying the insurance process. However, this option only applies to multiple locations of the same business. Difference types of facilities, like warehouses versus storefronts, likely still require separate policies.

Knowing what plan your commercial or residential property is filed under can streamline your claims process.

3. Specialized Coverage

What your property policy covers depends on the type of property you own. Residential properties often only require basic damage and liability protection to cover things like weather-related repairs or someone getting injured on the grounds. Homeowners might invest in additional protection depending on their specific needs.

Because businesses and commercial properties have different functions than homes and personal properties, their insurance plans are going to reflect that purpose. Two common types of specialized coverage that businesses might require include:

• Liability insurance:While residential properties also need liability insurance, commercial properties require more comprehensive coverage because they have more risks. Commercial liability coverage includes protections for slips and falls that customers or employees experience on properties, like residential liabilities plans. Further, it includes factors like defective products that are unique to commercial properties handling items meant for public consumption.
• Business interruption policies:Property damages can require more than repairs. Owners might have to temporarily close locations because the property is unsafe or unable to function in the meantime. In severe scenarios, the damage might be so complex and comprehensive that businesses have to relocate to a new facility. Business interruption plans cover lost income in these situations to support owners and employees through these challenges.

When submitting a claim, the specialized coverage can determine if you’re eligible to receive benefits. Because commercial and residential properties have different coverage plans, the claims process will vary.

4. Property Risks Level

In addition to specialized coverage, the types of property insurance consider the different risks associated with them.

Homeowners insurance offers basic protection against weather damage and vandalism because the risk level is often lower. Most risk levels for homes are based on factors like geographic location and local weather patterns.

Property insurance risk levels rise significantly for commercial properties, which can impact what insurance policies look like for commercial locations. Business owners must factor in local building ordinances that influence facility standards, the important documents stored on-site and even the costs and risks associated with replacing employees and equipment. Property insurance and other policies held by businesses should match the risk level of the property.

5. Level of Tailoring

Residential property policies are often standardized, meaning homeowners will likely get the same coverage across providers with small differences in offerings and special services. Prices also fluctuate by provider and because of other factors, like location. However, the basic protection for homeowners is the same, ensuring property owners can receive the coverage they need.

Commercial businesses are all unique, with properties and facilities designed to their needs and each offering different functions. Because of this, property insurance needs to match their needs and risks.

Commercial property insurance providers don’t offer standardized plans and instead allow businesses to tailor their plans to fit the coverage levels they need. Businesses can choose their coverage based on costs, needs, risks and other factors, allowing them to receive more comprehensive coverage or avoid overpaying for policies they won’t use.

6. Plan Provider

While property owners often expect different plans to have various providers depending on local availability, regulations and costs, claims can get complicated when people don’t know who wrote their plans originally.

Admitted providers write residential policies. They’re licensed by states and must comply with various standards and regulations when creating policies to offer homeowners. This option makes homeowners insurance less of a risky investment, enticing property owners to purchase the protection they need.

Alternatively, surplus providers write commercial property policies. They don’t have to adhere to state licensure or compliance standards, making them more flexible for businesses. However, this can also make them riskier investments.

Business owners should carefully research policies and plans before investing to ensure they receive the basic protection they need. When submitting a commercial insurance claim, surplus providers can create challenges for owners who are unsure what their plan includes.

Proceed With Your Commercial or Residential Insurance Claim With Public Performance Adjusting

The claims submittal process can be complex, regardless of the elements and factors involved in your case. Many individuals and property owners are unsure of how to proceed or the steps they need to take to optimize their received benefits.

When you partner with Performance Adjusting, we handle everything for you. While independent insurance adjusters will work for your insurance provider,we work for youand in your best interest. From assessing damages to negotiating the best deal with your provider, you can trust our team tosupport your needsthroughout the insurance claims process. We work with residential and commercial insurance policies, so you can receive assistance for any property you hold.

Contact Performance Adjusting todayto schedule a consultation and discover how we can streamline your residential or commercial insurance claim process.