Michael Shadeed, director for Franklin Street Insurance Services of Atlanta, shares his insight on how multifamily, office, industrial and retail property owners can work with insurers to expedite their Hurricane Florence policy claims, as well as how the loss damages will impact commercial property insurance premiums.
1. How is Florence’s impact on commercial real estate different from other major storms like Irma or Maria? The impact was driven mainly by severe flooding, which brings bacteria and rotting exposure to commercial real estate assets. With the consistency of storms over the last few years, Florence will have a profound effect on the federal government’s National Flood Insurance Program although it’s still too early to tell how rates will change.
In the last five years, New York, Florida, Texas, Louisiana, South Carolina, and North Carolina have all suffered billions in loss damages from individual events, all of which were substantially larger than the total amount of premiums collected for the program. The government continues to bear the brunt of these losses. The program is $20.5 billion in debt and losing money at a considerable rate.
2. How can property owners work with insurers to expedite their Florence policy claims? Preparation for pre-loss situations is the key and having claims advocacy at their agency is important. Adjusters have been on the ground from day one and making sure your asset gets attention should be their top priority. Franklin Street provides a detailed hurricane preparedness checklist and claim reporting instructions for our clients. Property owners should contact their insurance company to review their coverage and disaster plans well in advance of a storm.
3. Are the recent hurricanes making more policy holders reevaluate their insurance coverage and deductible levels? Yes, we’re getting many more calls from clients asking for policy reviews to ensure their assets are well protected. Purchasing the cheapest policy available often leads to coverage that has gaps or higher deductibles than expected. A simple deductible analysis can help property owners to assess their risk retention.
4. Will Florence have any effect on commercial property insurance premiums? No one knows the exact effect that Florence will have on premiums and deductibles. However, even if your assets were not directly affected by the recent hurricane losses, you are likely to be facing premium increases. Specifically, we are the most worried about the National Flood Insurance Program and its future. The program has been hemorrhaging money over the last 10 years, so Florence could be the final straw that leads to an overall policy reform. If not, then Congress might decide to forgive the program’s debt again like they did last November.
In either case, commercial owners should confirm that they are ensured through the correct competitive program for their type of assets. Now more than ever, you need to work with an experienced insurance broker that specializes in real estate and can help you to save on premiums without sacrificing coverage.
Michael Shadeed is a Director for Franklin Street Insurance Services. He can be reached at Michael.Shadeed@franklinst.com.