Community association boards can take steps to improve their chances of securing better premiums by using some simple yet practical insurance bidding strategies. During a recent CAI webinar, insurance professionals outlined several relatively easy steps boards can take to save money and protect homeowners’ investments when seeking policy renewals in a hard market.
Although there are signs the market appears to be stabilizing, the insurance industry continues to grapple with unsettling events such as the Surfside tragedy, rising construction costs, natural disasters, and tariffs. As a result, underwriting guidelines are shifting, companies are leaving the market, and premiums and deductibles are swelling. While these adjustments can be unsettling, they offer opportunities to provide more information and allow for better coverage, experts say. The traditional multi-broker model is no longer a viable option to purchase insurance, according to Jessica Knutsen, CIRMS, with USI Insurance Services in Falls Church, Va. Working with many brokers reduces the process to a race to get the best quote, she says. That situation creates delays and problems and quality suffers.
Knutsen says it’s important for boards to identify and know all the players involved in a complicated process. That includes agents, brokers, and insurance carriers. “You want to work with someone with good credentials and who understands the market,” she says. Knutsen, a member of the CAI Board of Trustees, recommends boards use experienced professionals who have earned CAI designations. CAI’s Community Insurance and Risk Management Specialist (CIRMS®) designation recognizes a demonstrated high level of competency within the risk management profession.
She also recommends boards take the time to learn and understand the feasible options. It’s important for boards to provide essential data to brokers on valuation, capital improvements, occupancy, amenities, loss history, and any other supplemental information when seeking insurance. Keeping good records is critical so underwriters can prepare accurate quotes. Boards should keep at least five years of records and know and understand loss ratios, which helps brokers develop a risk profile.
“A thorough job is critical. (Brokers) need to know everything and anything,” says Nishka Anderson with Greater New York Insurance Co., in New York. “You want to keep the (carrier) for a long time. The goals is to find the right fit.” Choosing to work with only one broker avoids market saturation and builds rapport, Knutsen and Anderson say. When selecting a broker, boards should look at credentials, experience, service delivery, and prospective broker resources, tools, and availability. “Trust, respect, and honesty is important,” Anderson says. “You want full disclosure.”
Knutsen and Anderson urge community association boards to start early when renewing policies. Don’t wait until the policy’s expiration date to start shopping around. They recommend beginning the process several months out. The long lead offers boards time to pull together relevant information, plan budgets accordingly, and make thoughtful decisions. “Insurance bidding is not about who knocks on the most doors,” Anderson says. “It is about knocking on the right ones at the right time.”
>>The Art of Insurance Bidding: A Sophisticated Approach for Today’s Market is now available on-demand.
