"Even many of the businesses with good insurance will not be able to rebuild without outside donations or loans.
“There’s a huge divide between the replacement cost and the insured cost,” said Heather Wessling Grosz, the vice president of the Kenosha Area Business Alliance. “The ability to replace those buildings on those blocks will be very difficult. It is out of reach for most of them.”
Many small businesses choose insurance that covers the cash value of their building or products rather than the actual replacement cost, which can be considerably higher.
“Let’s say you have a 10-year-old washing machine, and maybe it was $500 to buy and a new one would cost $600, but it’s depreciated, so now it would have a value of $50,” said Mr. Kochenburger, the insurance law professor. “So you’re not getting either the cost you paid for it or what it would cost to replace it. That’s what happens.
“It costs more to get replacement coverage, so this issue is going to bear more of an impact on lower-income folks where every dime really counts, and they opted for the less expensive plan,” Mr. Kochenburger said. “It is not intuitive how this works.”"
https://www.nytimes.com/2020/11/09/business/small-business-insurance-unrest-kenosha.html
“There’s a huge divide between the replacement cost and the insured cost,” said Heather Wessling Grosz, the vice president of the Kenosha Area Business Alliance. “The ability to replace those buildings on those blocks will be very difficult. It is out of reach for most of them.”
Many small businesses choose insurance that covers the cash value of their building or products rather than the actual replacement cost, which can be considerably higher.
“Let’s say you have a 10-year-old washing machine, and maybe it was $500 to buy and a new one would cost $600, but it’s depreciated, so now it would have a value of $50,” said Mr. Kochenburger, the insurance law professor. “So you’re not getting either the cost you paid for it or what it would cost to replace it. That’s what happens.
“It costs more to get replacement coverage, so this issue is going to bear more of an impact on lower-income folks where every dime really counts, and they opted for the less expensive plan,” Mr. Kochenburger said. “It is not intuitive how this works.”"
https://www.nytimes.com/2020/11/09/business/small-business-insurance-unrest-kenosha.html