Best Practices for Insuring “Hard-to-Place” Property

Coastal properties are often deemed “hard-to-place” by insurance underwriters due to the higher risk of damage or loss as a result of hurricanes or flooding. However, the term “hard-to-place” does not translate to “uninsurable,” and there are coastal insurance products that can cover all of the unique risks of both residential and commercial coastal properties. Before agents take on the task of insuring one of these hard-to-place coastal properties, here are some best practices to consider.

Determine the Risks

Each coastal home, business or property has its own unique risks that make finding adequate insurance more difficult than it is in other locations. Common coastal property risks include high winds, floods, coastal erosion and landslides. Agents should work to identify the exposures and risks associated with each particular property in order to come up with a policy package that can meet that particular property’s needs. In addition, agents should take into consideration additional details such as the occupational use of the property and the full cost of rebuilding after a loss to ensure that they can create a comprehensive coverage plan.

Educate Customers

Many customers are clueless when it comes to the complexities of coastal insurance, and often believe that their flood risk is what drives up the cost of their coastal property insurance. However, wind coverage is typically the culprit. In order to save money on wind premiums, customers may opt for a higher deductible, leaving them on the hook for a huge sum of money in the event of a wind peril loss. However, a wind deductible buyback can be purchased to reduce or even eliminate the deductible completely.

When it comes to flood insurance, most customers believe that they must purchase coverage from the National Flood Insurance Program (NFIP) is they live in a coastal area. However, while the NFIP does help make flood insurance more attainable in at-risk areas and can provide subsidies to help clients make improvements to their property to decrease their flood risks, there are also affordable private flood insurance options as well.

Find a Solution

Property owners should be aware of their risks and exposures and challenges, but they also need solutions. Agents should partner with an insurance wholesaler or Managing General Agency (MGA) that can write the coastal property insurance programs to the unique risk profiles of hard-to-place clients. By working with an experienced MGA, agents are able to ensure each client has comprehensive, customized coverage, allowing agents to build long-lasting relationships with their clients and helping them to quickly grow their agencies within the coastal property community.

About Wilmington Insurance Agency

Wilmington Insurance Agency delivers comprehensive coastal property solutions. We are a Managing General Agency and provide independent insurance agents with property and liability insurance solutions for residents and businesses primarily in Maryland and Virginia. We work alongside our sister company, Wilmington Insurance Company, established in 1996 and providing Property & Casualty commercial lines business, homeowners, and condominium insurance in the state of Delaware. To learn more about how we can help you to expand your book of business in the coastal market, contact us at (302) 231-2800.