What to Do When a Property Owner Has Had Two Insurance Claims and Cannot Renew Coverage
Insurance situations can quickly become complex, especially when a single property owner experiences multiple insurance claims. In such scenarios, the struggle often lies in finding an insurer who will renew policy coverage or issue a new one. This article explores viable strategies for property owners facing such challenges, ensuring that your properties remain secure and your peace of mind intact.
Strategies When Facing Non-Renewal or Refusal of Insurance Coverage
Seeking Independent Insurance Agents
While major insurers like State Farm, Geico, and Allstate may not be willing to offer new coverage due to a high claims history, independent agents are typically more flexible. They often represent multiple insurance companies and can navigate the complexities of varied coverage options. Begin by contacting several independent agents in your area. They may be able to provide standard coverage, or if not, non-standard companies can offer reduced coverage with higher premiums.
Contacting Your Insurance Agency
Start by reaching out to the insurance agency that has previously handled your coverage. They might have insights into why your claims weren't well-received or can suggest a different agent within their network who can take on your case. This relationship can be instrumental in identifying a suitable alternative.
Engaging Your Real Estate Agent or Attorney
Reach out to your real estate agent or attorney to seek recommendations or guidance. Professionals in these fields may have connections with insurance brokers who can help you navigate these challenging situations. Collaboration between legal and real estate professionals can also offer a robust approach to addressing your insurance needs.
Improving Your Properties and Appealing to Underwriters
Upgrading Your Properties
To strengthen your chances of obtaining insurance, ensure that your properties meet high standards. Bring your properties up to snuff, as if you were preparing to sell them for top dollar. This action demonstrates your earnest efforts to work with underwriters and address any issues that may be impacting your insurance coverage.
Exploring the Involuntary Market
Many states have markets designed for those who have been unable to obtain property coverage. These markets are often referred to as the “Involuntary Market” or “Residual Market,” and they offer alternatives for difficult-to-place risks. Reach out to local agencies that can provide coverage for your properties through these state plans.
Considering Non-Admitted Carriers in the Excess Market
Another approach is to work with an agency that writes coverage through providers in the Excess Market. This market includes well-known entities like Lloyds of London, which offer coverage on an individual risk basis without the need for published rates. These companies often provide affordability and flexibility, even if the coverage is priced higher than that of admitted carriers.
Addressing Underlying Issues and Improving Tenant Relations
Addressing Liability Losses
If your insurance claims have been for liability losses, it's crucial to address the underlying issues that may have led to the claims. Identifying and mitigating these problems can prevent future claims and may also be helpful in securing new insurance coverage.
Understanding the Patient-Care Factor in Medical Malpractice
A related insight is drawn from a book written by a surgeon over 20 years ago. The research highlighted that the frequency and severity of malpractice lawsuits were not always accurately reflected by the number of claims or the size of monetary demands. Instead, the factor that correlated most strongly with whether a doctor was sued or not was how well the doctor was perceived to care for their patients.
This principle can be applied to tenant-landlord relations. An honest look at your relationship with your tenants can reveal areas for improvement. Enhancing your relationship and making both you and your tenants happier can reduce the likelihood of claims and cancellations in the future.
Conclusion
Facing non-renewal or refusal of insurance coverage can be daunting. However, by utilizing independent agents, exploring alternative coverage markets, and improving your properties, you can find solutions. Additionally, addressing underlying issues and enhancing your relationship with tenants can contribute to a more secure and satisfying insurance experience.