According to the National Oceanic and Atmospheric Administration website, “the US has sustained 308 weather and climate disasters since 1980 where overall damages/costs reached or exceeded $1 billion (including CPI adjustment to 2021). The total cost of these 308 events exceeds $2,085 trillion“.
Through October 8, 2021, there have been 18 weather/climate disaster events in the US, each with losses exceeding $1 billion – stated another way, the US is now averaging a billion-dollar disaster EVERY 20 DAYS!
Disaster events in 2021 include:
- One drought/heatwave event;
- Two flooding events;
- Nine severe storm events;
- Four tropical cyclone events;
- One wildfire event; and
- One winter storm/cold wave event.
This list is four events shy of the 2020 annual record of 22 events. (For reference, the average number of billion-dollar events from 1980 to 2015 was 5.8, while from 2016 to 2021, the average number of $1B events has almost tripled to 16.5, all numbers inflation-adjusted).
Hurricane Ida is the most costly disaster to date in 2021 — exceeding $60 billion. It will be ranked among the US’s top five most expensive hurricanes on record (since 1980).
The map below shows the 18 billion dollar disaster events this year.
As you can see, these disaster events are becoming more robust, more frequent and don’t appear to be slowing down. Suffice to say, insurance carriers need for meaningful property rates and improved terms will continue. In addition, the cost of labor and materials will continue to trend up due to the increased demand from these events as well as supply chain pressures.
To help your property reduce today’s market effect, below are Five Tips for Approaching Your Next Insurance Renewal:
1 Get an early start – 120 days before the expiration.
- In a challenging insurance market, which we are currently in – when an insurance carrier has more time to review risk, gaining comfort with it, better terms and conditions are produced.
- Waiting until the last second to seek terms exposes the insured to the whims of underwriting. With little or no time left for negotiations between broker/underwriter to offset initial pricing, the insured suffers, oftentimes, with less than desirable results.
2 Choose brokers with hospitality expertise & experience.
- Traditional insurance didn’t have hospitality-related risks in mind when developing policy coverages/forms – there are many and necessary policy endorsements to add to complete a hospitality-related insurance program. It is essential to align with brokers who understand this to ensure your company’s assets are appropriately protected.
- Look for membership/involvement in your industry.
3 Control the Bidding Process.
- Market capacity for hospitality risks is limited.
- Involving too many brokers can clutter the marketplace, lessening a carrier’s aggressiveness if multiple submissions are received from numerous brokers.
- No more than two brokers should be involved to help eliminate overlap.
- Best practice – interview brokers, including intel on their carrier lineup – pick the broker that you feel aligns best with your company’s mission/culture, who will best represent you in the marketplace and give them full access to it – this eliminates above, producing the greatest results.
4 Encourage a Carrier Loss Control visit.
This is your opportunity to tell your company’s story – in your own words.
- Provide schedules, pictures, diagrams, loss experience, safety programs.
- Display an interest in the carrier’s loss prevention services and resources.
5 Don’t choose on price alone.
- Low pricing doesn’t overcome inferior coverage – make sure you understand what you are giving up before settling on the lowest price.
- Potential for Directors & Officers claims – you had the opportunity to purchase the right coverage, you chose cheapest – now a claim arises, your Board may be on the hook.
For over 40 years, IHS Supplier Network members Gregory & Appel’s Resort Property Management team has provided traditional and alternative risk solutions for resorts (including timeshare), property managers, exchanges companies, hotels, HOAs and COAs throughout the US and Mexico.
Since its inception, our commitment has and continues to remain: to work as a partner with the management company and HOA to help eliminate claims, save money and ultimately, help the manager retain and attract new management contracts.
This process has been successful for both our traditional and alternative risk clients in the face of today’s challenging insurance landscape.
If your property has:
- Any insurance and claim issues that come up;
- Any questions regarding your renewal or present coverage;
- Would like to receive a competitive quote; or,
- If you would like to discuss best practices for risk management at your property, please let us know.
We are here to help.
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