Is my restaurant's property limit still enough?
If it is still the number from the day the store opened, it may not be. A property limit is set when the policy is written and does not move unless the declarations show an automatic annual increase. Nonresidential construction costs are about 32 percent above their 2020 level, so a build-out insured at its opening cost may not rebuild today. Most property policies also carry an 80 or 90 percent coinsurance clause, which reduces a claim when the limit is too low.
What the limit is supposed to be
For a tenant, the building limit usually covers the improvements made to the space, and the business personal property limit covers the equipment, furniture, inventory and smallwares. Each one should be what it would cost to replace them today, at today's labor and material prices. It is not what the build-out cost when the store opened, and it is not the depreciated value on the books.
The number comes from a current replacement cost estimate: a contractor's figure, an appraisal, or the carrier's own valuation tool. Construction costs on the Turner Building Cost Index stood at 1552 in the second quarter of 2026 against 1177 for the 2020 average, which is where the 32 percent comes from. A store opened in 2019 or 2020 and never revalued is the one to look at first.
What coinsurance does
Say a policy has a 90 percent coinsurance clause and a $1,000,000 limit on a space that would cost $1,400,000 to rebuild today. The clause expects a limit of at least $1,260,000. A $400,000 fire is then paid in proportion: $1,000,000 divided by $1,260,000, or about $317,000 before the deductible. The business absorbs the rest, even though the loss was well under the limit.
An agreed value endorsement suspends the clause for the policy year. The carrier grants it on a signed statement of values, which is one more reason to have a current number.
Why 2026 is a good year to fix it
Property is the line that came down this year: 6 to 13 percent for a clean account, its eighth straight quarter of decline. Raising a limit adds premium, and a falling rate pays for part of it. Underwriters are also pressing on valuations at renewal, so a current replacement figure strengthens the submission.
Business income deserves the same look, because a limit set at opening does not move with sales: the business income guide. For a store still being built, the limits get staged with the construction, moment by moment, in the build-out guide. And the property question on the insurance check is this page in one line.