If you are an owner of an apartment property that has been non-renewed by an insurance carrier for any reason, you’re likely being faced with an increase in insurance costs you weren’t prepared for. You may also be faced with an inability to maintain the insurance protection you would desire.
We are honored to help you navigate this process to the best of our ability by answering the following common questions that are asked of us.
How did we get here? Without dwelling too long on why the insurance market is changing so drastically, we will share that it is largely attributable to the impact on the insurance industry of “social inflation” as well as inflation of the true cost to rebuild commercial properties, which is what insurance is rated on. While it is true that the California Department of Insurance has denied certain insurance carriers’ applications for rate increases, it would be false to state this crisis isn’t occurring nationwide, as many insurance carriers’ assets have become limited due to inflation impacting both claims and reinsurance costs.
What information is needed to get quotes? Other than very basic information about the property such as square footage, number of units, and rental income, listed below is what is most crucial to always keep on file to maintain the best insurance options moving forward:
- Confirmation of the brand of the current electrical panels, both main and sub panels. We recommend taking a picture up close of the label of the electrical panel which should display the brand.
- Descriptions and receipts for all updates made to roofing, electrical, plumbing, and HVAC.
- Hard copy currently valued Loss Runs from the current insurer, regardless of whether you have had any claims.
How do I go about finding a new carrier? We recommend selecting only one independent insurance broker to represent you in the insurance marketplace. Insurance companies only allow one insurance broker to represent a client. Having multiple brokers representing you reflects negatively on you and indicates to insurers you may not be familiar with how to manage insurance for your properties.
If you can compare this process of buying a new insurance policy to buying a new property, it would not make sense to submit an offer for a property from two different real estate brokers. Pretend in this case an insurance carrier is a potential new property you are searching for and rely on a broker you trust to submit your risk profile to the insurance carrier.
How do I know a broker is going to come through for us and find us replacement insurance? Our suggestion is to ask the broker going to the market for you for a full list of insurance companies they are going to approach on your behalf. You can then share that list with a secondary insurance broker and ask if the first broker missed any potential insurance sources you should be considering.
Combining your current information regarding the value of your property with the expertise of a qualified, experienced broker will result in the best outcome possible when navigating today’s property insurance marketplace.
Contact Cameron Stewart, VP, Crest Insurance Group, any time at 858-547-1128 or cstewart@crestins.com for honest feedback on your real estate portfolio.