MIAMI—With all the talk of replacement cost levels on insurance policies climbing to an all-time high, how should commercial real estate owners think about coverage? That depends, in part, on the age and location of your asset.

Replacement cost—pure construction cost to rebuild a structure from a clean piece of dirt to full usage—includes the hard and soft costs of new construction. Michael Shadeed, a director of Insurance Services at Franklin Street, tells GlobeSt.com the older an asset is, the more owners have to look at to make insurance requirements are correct.

“Lenders are going to ask for Law and Ordinance coverage, which also drives up the price of the insurance premium,” he says. “Increased zoning costs, architectural costs, and demolition of a part of a building that isn't up to code all fall under Law and Ordinance coverage.”