# Total Insurable Value (TIV) : What is it? – Insurance Broker

## sum insurable Value ( TIV ) :

total insurable respect is a property insurance term referring to the summarize of the full replacement cost value of the insured ’ randomness covered property, commercial enterprise income values, and any other insure property. Total insurable value is typically used in property insurance policies for businesses and other organizations that see against price to an organization ’ second buildings, contents to a report cause of loss, such as a displace, flood, windstorm etc. A commercial place policy may besides cover loss of income or increases in expenses that result from the property damage .

## How Do You Calculate A Total Insurable Value ( TIV )

A sum insurable prize ( TIV ) is calculated by adding together the sum physical place, equipment, inventory, tools, etc. at each location and combining it with the final number calculated on a amply completed business income worksheet. A business income worksheet is a form that is provided by your indemnity agent that is used to estimate an organization ’ sulfur annual business income for the approaching 12-month menstruation, for purposes of selecting a business income limit of indemnity. The choose percentage, or multiple, of the constitution ’ south estimated annual business income for the approaching 12-month period, should be based on how long it would take to replace all damaged property and resume operations in the event of a worst-case loss. For some organizations, this period of time could exceed 12 months. Most insurers require a accomplished business income worksheet as a condition of activating the business income agreed value coverage choice .

#### Why Is Having An Accurate Total Insurable Value (TIV) Important?

The total insurable respect ( TIV ) is an authoritative number for all commercial property policies because it is typically the count that is applied against the rate to determine the premium. Ex. [ \$ 1,000,000 ( TIV ) x \$ 0.4 ( Commercial Property Insurance Rate per \$ 100 of TIV ) ] /100 = \$ 4,000 annual premium per year .

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## FAQs

### 1. What does full insurable value mean?

In a nutshell, full insurable value is the full rate of all of a business ’ mho guarantee place. For exercise, under a Commercial Property Insurance policy, that would mean adding up the respect of the build, office or workspace covered under the policy plus the value of the contents within the structure that are besides insured such as any renovations or upgrades done by the commercial enterprise to the workspace ; any machinery, tools or equipment that are covered ; insure stock or inventory which can include property store off-site ; function equipment like computers, printers and phones ; cash and other fiscal instruments and any other forcible assets owned by the business that is covered by their indemnity policy .
Depending on the policy, coverage may besides include insurance for non-physical property like business income and/or the extra costs the business would have to pay for an incident covered under the policy. Those values would besides be included in the full moon insurable rate.

### 2. What is the insurable value of a property?

The term “ insurable value ” is typically used to refer to the sum of insurance that can be carried on items contained within a property that are susceptible to loss during an insured queer, like a fire or a flood, that the insurance company will compensate the policyholder for in the event of a loss covered under the policy. This can include the costs of clearing a site and the reconstruction costs of a structure such as british labour party and materials, arsenic well as the prize of the contents within the structure .

### 3. What is an insurable replacement cost?

insurable replacement monetary value refers to the estimated actual cost to replace a social organization or an asset that is completely destroyed by a risk included under a commercial property insurance policy and that structure or asset can not be repaired. For example, if a ardor burns down a warehouse, the insurable refilling cost can include the costs of build up materials, architect and/or technology fees and contractor/construction labor costs. The insurable successor monetary value does not include the ‘ market value ’ of the place in wonder .

### 4. What is total insurable value vs replacement cost?

total insurable rate is a calculation of all insurable assets ( and business income ) that is based on the prices paid for the place that is covered by the commercial property policy policy. surrogate price is the full sum of all the costs necessity to replace those assets in case of a sum loss. Because the calculations are based on different criteria, the full insurable value will be different from the successor cost .

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