What's Happening with Property Insurance?

Property InsuranceAs you might have heard, property insurance is getting more and more difficult to get.  This is due to the many natural disasters we have experienced over the last several years. The insurance companies have paid out billions of dollars in losses and are changing their underwriting guidelines in response.  So, what does that mean for your nonprofit?

First, do you own any property?

  • Buildings?
  • Office Equipment?
  • Other Types of Equipment?
  • Supplies & Inventory?
  • Art or Artifacts?

If so, you probably have it insured.  You can expect that your property insurance rates will increase or your insurance company might decline to continue to provide the coverage to you.  They are looking for any way they can to make up for the huge losses they've sustained.

New Protection Classifications

For as long as I can remember, one of the key factors to property insurability was the Fire Protection Class.  We relied on the fact that if the location was in what would be classified as a "safe zone" from a fire standpoint that we would be able to provide coverage.

That's all changed...  The whole fire analysis rating system has changed. And, many areas that used to be considered safe are now classified as being in high fire areas.  And, we have many clients that have had their property insurance canceled or had the premium increase significantly because of this.

Even areas that are seemingly in low fire hazard areas are being affected by all of this.  

What to do?

I won't lie, this is a difficult situation for many property owners. But, there are options if your broker knows what to do and where to look.

1) Consider changing the type policy you have from "special form" to "basic form" so that you are only buying coverage for very basic types of claims.

2) Consider increasing you deductible to lower your premium.

3) If you think you can't get coverage then work with a broker that has a lot of access to specialized products in the insurance marketplace.

 

 

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