Required for your Loan
One of the key driving factors for commercial property insurance is lender requirements. Let’s be honest – how much insurance would you buy if the bank wasn’t forcing you?
What they are Requiring?
Banks can require a litany of coverage specifics. Commonly targeted items include…
|Deductibles – Wind / Hail Deductible; ‘Flat’ or ‘Per Location’ Deductible|
|Co-insurance – Require a certain co-insurance percentage or ‘Nil’ co-insurance|
|Financial Strength Rating – The insurance carrier needs to have strong backing|
|Other lines of coverage – Flood insurance, Earthquake insurance, Terrorism insurance|
|Liability Coverages – General Liability and Excess Liability at a certain limits|
Sometimes issues arise concerning your insurance and the bank’s requirements.
My #1 Tip…
My #1 tip for managing this kind of situation – seek out niche insurer programs.
There are niche insurers that put together coverage packages tailored to satisfy bank insurance requirements.
They’ll include, at sub limit, required additional coverages like ordinance & law, debris removal and (maybe) flood and earthquake.
They’ll offer full replacement cost at an appropriate co-insurance percentage.
And they’ll make sure the carrier has a financial strength rating that meets the banks guidelines.
Using this advice
You or someone in your office should get to know about the ‘niche insurers programs’ in the insurance marketplace.
Narrow it down to industry-specific programs.
From there, evaluate which of those select insurers are offering the most competitive pricing.
Addressing insurance requirements is important, but it doesn’t help you lower the premium.