As an aggressive insurance producer I get to review and analyze the insurance policies of a lot of property owners/managers. What I have noticed is that it is typically 1 of 2 very different scenarios.
Some property managers have the same insurance policy for years, they are paying low premiums and are very happy with their broker, their policy and carrier. And then there are those who are paying premiums thru the roof, they are unhappy with their broker. They are basically unhappy with the insurance industry in general. They are just unhappy. Period.
After thoroughly analyzing the factors that cause this huge gap between the happy and the unhappy insureds I have seen a clear pattern of different methods of risk management, or perhaps it is their different perspective on the purpose of their insurance policy.
The former have their policy exactly what the policy was designed for. To protect them against the“unexpected” risk. These managers put in place effective risk management to prevent the semi-expected losses from occurring. Some of their good habits include Security Surveillance Cameras, better screening of tenants, the interior and exterior of their buildings are in great condition and maintained properly. It sounds pretty basic but as a result their insurance carrier love to keep their business and will keep the premium at the best rate possible. = Happy insured.
The latter don’t take the above mentioned measures to prevent losses from occurring. At least not as serious as they could. They tend to have frequent claims. It almost appears that they consider their policy as an ATM machine… As a result their premiums go up. Some of the carriers that offer the very low premium rates will non-renew the policy if there were claims. When we as the brokers needs to reshop the policy after there is claims on the Loss Runs the options narrow significantly and the premiums end up being much higher than expected. = unhappy insured.
As one of the service we provide to our valuable clients we suggest effective Risk Management. When we suggest loss preventive measures, some of my clients say they don’t wanna “spend the money”… What they don’t realize is that the money spent on risk management is the best investment in the building and the return on investment is the money saved on premiums for years to come.
I couldn’t emphasize enough how beneficial it is to building owners/managers to enact proper risk management. If an owner would have no insurance coverage on a building they would obviously do everything in their power to prevent any claims. That’s the level of consciousness a building owner should have even with a policy in effect, if they wanna have their premiums where they would like them to be.