For many associations, insurance premiums are the largest overhead cost, so it’s very important to accurately forecast any changes for the coming year. Each year, we review market conditions and trends that may impact your insurance renewal premiums, providing you with an educated look at how they may increase or decrease your association’s budget. Below, we are breaking down what you can anticipate for the remainder of 2019, including current renewals, and as you begin the budget planning process for 2020.
Property/Hazard Insurance Rates:
For the past several years, beginning in 2014 and continuing through 2018, we have generally experienced decreasing property premiums and improved coverage terms. This type of environment is known as a “soft” market. By the end of 2018, the property market began to show signs of firming. That continued into the first quarter of 2019. This trend has continued through the second quarter and appears to be accelerating more significantly than initially expected.
Adverse loss development from recent catastrophic events and an increase in the cost of reinsurance have been catalysts for this acceleration. Two consecutive years with combined loss ratios exceeding 100% has heightened the focus of management and underwriters to reduce aggregate exposure and increase rates.
In addition to rate increases, we are witnessing tightened risk selection, reduced capacity, increased deductibles, and policy form revisions. Some carriers are approaching New Business and Renewals differently and might be more aggressive offering a New Business quote vs. a Renewal quote, for essentially the same risk. Insurance carriers are utilizing a level of underwriting discipline we have not seen in a while.
- At this time, our recommendation would be to budget for an increase of 10% to 30% for rates, and 5% to 10% for appraisal increases.
- For coastal communities with losses and/or older structures, you should anticipate an increase on the higher end of this range.
Ancillary Coverage: (General Liability, Crime, D&O, Excess Liability)
We continue to expect these lines of coverage to remain relatively “flat” with the exception of General Liability and Umbrella. Due to adverse loss experience (severity and frequency), compounded by water damage subrogation claims from Personal Lines carriers, some carriers are pricing themselves out of this market. Others are adding restrictive endorsements, such as a Weapons/Firearms Exclusion, which basically forces agents to move carriers.
- We recommend that you budget for a 10% premium increase for General Liability and Umbrella.
Flood Insurance Rates (NFIP):
As of April 1, 2019, there were changes to the NFIP that will affect both new and renewal policies.
- Base premiums will increase an average of 7.3% after surcharges and fees. (As always we caution not to use this 7.3% to estimate any specific policy increase as this is an average of the NFIP’s many varying rate increases and policy types.)
Understanding what an elevation certificate is and how to read one will help you better navigate the issues a home may have in regards to flood insurance, a critical component of the home buying process. An elevation certificate (EC) is a document prepared by a land surveyor (or other licensed professional) that details the elevation of a home in reference to the Base Flood Elevation, commonly referred to as the “BFE.” The BFE is the elevation that floodwaters are estimated to have a 1 percent chance of reaching or exceeding in any given year. Remember, no type of flood damage, no matter the source of the water, is covered by standard homeowners policies.
FEMA Fact Sheet: Elevation Certificates
FEMA Elevation Certificates Instruction Guide
How an EC Is Used
If the property is in a high-risk area—a zone indicated with the letters A or V on a Flood Insurance Rate Map (FIRM)—the EC includes important information that is needed for determining a risk-based premium rate for a flood insurance policy. For example, the EC shows the location of the building, lowest floor elevation, building characteristics, and flood zone. The EC consists of six pages. Pages one through four are informational regarding the property, the Flood Insurance Rate Map (FIRM), and data pertaining to the structure. Pages five and six are photos of the property and structure. Your insurance agent will use the EC to compare your building’s elevation to the BFE shown on the map being used for rating, and determine the cost to cover your flood risk.
Section A (Page 1)
This section provides pertinent data including: the address of the property, the property description (otherwise known as the legal description), the latitude/longitude of the property, and information regarding the type of structure that is on the property such as: basement, crawl space, on slab, etc., and information regarding buildings with attached garages.
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As we continue to invest in resources to improve our clients’ experience, we are excited to announce the adoption of Indio – Gulfshore Insurance’s Secure Online Insurance Application, Document Sharing, and Document Signature Platform.
We recognize how cumbersome the insurance application process can be for most. Indio is a tool that allows us to provide clients with a fully digital application, renewal, and document signature process! This secure online platform combines all of the different functions of a typical insurance renewal process into one easy platform. Here are some of the key features and efficiencies this will bring to our insurance process:
- Online portal allowing easy access to insurance applications/forms whenever and wherever clients need them.
- The ability to sign all applications and forms live on the platform.
- The ability to upload and download documents as needed in a secure environment to ensure nothing malicious is sent.
- The ability to assign applications, forms, or even sections within applications to specific points of contact within your organization; in turn, reducing the need to print, scan, or even sign forms offline.
- The security of knowing your data is confidential!
For more information, contact us today!
NAPLES, FL (June 18, 2019) – Gulfshore Insurance Inc., a leading insurance agency in Florida, has announced the addition of Private Risk Services Client Advisor, Jon White, to their staff.
With over 12 years of industry experience, White’s business and sales strategies are innovative and effective. “Jon White is an asset to our Private Risk Services division. His go-getter attitude and passion to deliver impeccable service to clients are great contributions to the team and the overall growth of our agency,” stated Brad Havemeier, President and CEO.
In his new role, White will specialize in complex lifestyle protection for successful families, including high value homes and estates, yachts, and auto collections. White will also partner with wealth advisors, trust and estate attorneys, and luxury realtors to limit his clients’ liability exposures.
About Gulfshore Insurance
Gulfshore Insurance is an insurance agency based in Naples, Florida. Founded in 1970, the agency provides professional risk management and insurance coverage to businesses and individuals. Gulfshore Insurance combines the best characteristics of local agencies with the expertise of national brokers. Their associates in Naples, Fort Myers, Fort Lauderdale, and Sarasota advise more than 10,000 clients throughout the state. To learn more, please visit www.GulfshoreInsurance.com.
Did you know that…
- More than half of U.S. businesses have experienced a cyber attack in the past year.
- Of those businesses hacked, 72% spent $5,000 or more.
- 1 in 9 system compromises happen in under a minute.
- 83% of compromises took a week or more to detect.
- All 50 states require notification when a data breach occurs.
In recent years, cybersecurity threats have become increasingly complex, and businesses of all kinds – including the construction industry – face ever-growing risks to their reputation, their finances, their continuity of operations, and even to the safety of their job sites and equipment. A recent Forrester survey revealed that more than 75% of respondents in the construction, engineering and infrastructure industries had experienced a cyber-incident within the last 12 months. It is projected that cyber crime will cost businesses approximately $6 trillion per year on average through 2021.
Cyber threats can expose all of a company’s digital assets: business plans and acquisition strategies; proprietary construction plans and designs; customer, contractor, and supplier lists and pricing; personally identifiable information of employees and contractors; protected health information of personnel; and facilities security information. Cyber risk can also cause business interruption and reputational harm: for example, a ransomware attack might not lead to a loss of information, but by shutting down a company’s computer networks, and potentially destroying information, it can cause an enormous amount of lost productivity and business delay. And the ability for cyber attackers to hijack physical devices – from security cameras to vehicle telematics to industrial control systems – means that there is an ever-increasing risk of property damage and personal injury due to cybersecurity incidents.
There are a number of ways to mitigate cybersecurity risk, including:
- Policies and training. The very best IT can’t prevent human error. It’s essential to implement clear policies on cybersecurity basics like use of strong passwords, multi-factor authentication, use of encryption for sensitive data, and restrictions on the use of removable media. It’s also essential to train employees on best practices, including how to recognize potential phishing emails and sensitive information to which they have been granted access.
- Vendor management. Contracts with subcontractors, suppliers, and others are an essential component of mitigating cyber risk. Legal review of representations and warranties about the cyber practices of a business partner, along with appropriately tailored indemnification and hold harmless provisions, can be a foundation for mitigating cyber risk associated with doing business with third parties.
- Insurance. Cyber insurance is widely available and can be an effective component of an overall insurance program. Most cyber policies cover the costs of forensic investigation and breach notification associated with a cyber incident, but many do not cover other costs that could be associated with a cyber incident. For instance, a business email compromise, in which a spoofed email dupes a company into wiring money or employee information to a fraudulent account, is often covered under a crimes policy. However, property damage, personal injury, and environmental damage, all of which are possible consequences of a cyber-attack, may be more likely excluded from cyber coverage and, instead, covered under general liability or other policies. Because of the many ways in which cyber threats can play out, and the intricacies of the intersection of various insurance coverages, it is essential to assess cyber coverage in the context of a comprehensive insurance program.
Cyber-attacks now occur to every class and size of business. Although the steps listed above can’t eliminate cyber risk altogether, they can greatly reduce the likelihood of an incident, and reduce its cost and impact if one occurs. The high cost of cyber-attacks makes going without cyber insurance a real risk.
Working with a trusted insurance agent who has proven expertise in cyber security and familiarity with the unique risks posed to the construction industry is the best way for companies to ensure that they are adequately covered.
