Hurricane Ian caused an estimated $22 billion–$32 billion in damage to residential and commercial property. Storm surges destroyed another $6 billion–$15 billion in real estate assets, according to CoreLogic. Representatives from three insurance organizations recently weighed in on the implications for commercial property owners.
- Gallagher—Insurers won’t be turning a blind eye to incomplete underwriting or underreported values anymore. Understanding the risks that pertain to their assets—flood elevations, age of roofs, general conditions of the asset—is the first step in controlling the premiums. Insurers may look for increased minimum deductibles for larger Tier 1 exposed portfolios, and they will certainly focus more positively on the better protected assets.
- Hub International—In general, insureds need to show underwriters why their assets are best in class with evidence such as hurricane and water mitigation programs and checklists. Well-written business continuity plans will help demonstrate proactive risk management to the insurance marketplace. Any loss history presented with the underwriting submission should include a narrative discussing the loss, mitigating strategies, and any post-loss corrective action.
- Insurance Information Institute—Potential insurance premium increases will depend on businesses’ physical structures and contents. Retail and restaurants are probably the most vulnerable but may not be the most expensive. A business that has manufacturing equipment could be much more expensive to replace.
Adapted from “Hurricane Ian’s Impact on CRE Insurance Rates,” written by Jordana Rothberg and published in the Oct. 4, 2022, edition of Commercial Property Executive.