SEVEN STRATEGIES
7
Strategies
For Community Associations To Combat The Hard Market
Associations across the state
are facing the effects of a “ hardening insurance market .” In a hard insurance market , premiums increase while capacity or the insurance carriers ’ willingness or ability to write policies decrease . The lines of insurance most impacted are standard property coverages such as fire , hurricane , flood , and earthquake ; Directors and Officers Liability ; and Umbrella / Excess Liability . While insurance premiums are largely dictated by insurance carriers , associations can take proactive measures to help combat the “ hardening insurance market .”
MEET WITH YOUR INSURANCE AGENT Associations can find out what marketing strategy their agent intends to deploy
ASSOCIATIONS SHOULD DISCUSS WITH THEIR AGENT WHAT COMPANIES THEY WILL SOLICIT QUOTES FROM AND WHY AND WHAT ALTERNATIVES CAN BE EVALUATED TO REDUCE PREMIUMS
( i . e ., higher deductibles , elimination of coverage that are “ nice to have ” versus mandatory , etc .).
REVIEW YOUR LOSSES Acceptable loss runs will be the key to getting underwriters to quote your association . If you have a poor loss history , associations should be able to demonstrate key processes implemented to reduce troublesome losses . For example , many associations have implemented high-risk safety inspections of units to help prevent future water damage losses .
REVIEW INSURABLE VALUES AND REPLACEMENT / CONSTRUCTION COSTS
Insurance carriers are closely reviewing an insured ’ s building values to ensure buildings are not underinsured . If the values do not appear to reflect the current replacement costs , carriers may not be
receiving adequate premiums for your risk . If possible , get a professional appraisal or an estimate from a qualified contractor or other source to justify your values .
MEET WITH THE INSURANCE UNDERWRITERS It is easier for an underwriter to increase premiums or decline a risk when they do not know your association . You know all the best features of your association and can readily answer any questions , which will also facilitate the quote process .
START THE MARKETING PROCESS EARLY
With this difficult marketplace , starting 90 – 120 days before your renewal date is necessary to explore all possible programs that might be available .
BE PREPARED FOR AN INSPECTION BY INSURANCE CARRIERS Prepare for an insurance inspection by highlighting the best features of your property and tidying up or fixing the areas that need improvement . However , be sure you honestly disclose any deficiencies when asked .
CONSIDER UPGRADING LIFE SAFETY SYSTEMS
Certain carriers will require certain protection , such as smoke detectors , in order to insure a risk . Discuss the premium savings if you commit to installing any recommended systems or equipment .
The market outlook in terms of pricing will continue to tighten , with many carriers looking to spread the losses out across their insureds . In some cases , there could be a lack of capacity for very large accounts needing high limits . This year it will be imperative to be proactive and work with your insurance agent to take the steps outlined above to minimize potential increases in costs . +
BY : ELAINE PANLILIO , ACCOUNT EXECUTIVE ATLAS INSURANCE AGENCY
Elaine Panlilio is an Account Executive in the AOAO Unit at Atlas Insurance Agency . Elaine is an alumnus of UH – Hilo and has been in the insurance industry for 14 years . She holds the following Insurance Professional Designations through the National Alliance for Insurance Education and Research : Certified Insurance Service Representative ( CISR ), Certified Insurance Counselor ( CIC ) and Certified Risk Manager ( CRM ).
14