Insurance Update

For many of us, insurance used to be on autopilot.? You’d reach out to an insurance agent, get the quote, purchase the policy and focus on managing the property, increasing NOI, reducing vacancies, etc.? Now, more and more clients have reached out saying they have been affected by large premium increases, dropped coverage and major policy changes.? We sat down with Gretchen Schrock, a Country Financial Agency Owner, to get an update on the current state of the insurance industry and how investors and owners can set themselves up for success when dealing with difficult insurance decisions.

Over the last decade, insurance companies have written more and more policies.? Some lacked a detailed review or underwriting process on the quality of the properties, parties insured and premiums paid were low to increase business.? This has become a major issue now with the increase in national disasters and replacement costs.? When you combine the costs associated with paying out policies for properties affected by wildfires, hurricanes, and derechos as well as “normal” occurrences, profitability and even financial solvency has moved front and center for some insurance companies.? As result, companies are returning to strict analysis of actuarial data, shedding outlier properties, raising premiums, and even pulling out of markets.?

What we wanted to know is how we can best reduce the costs of these changes while maintaining the coverage we need for our properties.? The first item that Gretchen mentioned was to look at your deductible.? Depending on your situation, raising your deductible could be an easy way to have a large impact on your overall premium.? To find more savings, ask about discounts that could be applied to your policy.? New roof discounts, renovation discounts, bundling discounts and military discounts are all examples of what may be available to you.? Some security systems, alarms and sprinkler systems may qualify for reduced premiums as well.? A final piece of advice was to be thoughtful about what claims you do decide to make.? A long claim history can negatively affect your ability to get an insurance policy and at what price.

The best overall advice from Gretchen was to be more involved in the insurance process.? Know your liability number needed to cover assets and know your policy coverages.? Having a knowledgeable and personable insurance agent can help you along the way.

Gretchen’s Insurance Must Haves

• Umbrella policy or liability coverage enough to protect total assets
• Medical payment coverage – could help stop a potential lawsuit with a medical payout.
• Service line coverage – possibly coverage for water and sewer lines.