John Watt, ARM, Program Manager Unitas Financial Services
Why are Insurance Costs Rising?
- Increased loss frequency because tenants spend more time at home due to working from home and restricted activities. This has shown an unexpected rise in fire and liability claims.
- Increased cost and availability of building materials. This means it costs more to repair a loss, and it takes longer to do it, further increasing costs.
What can I do to Reduce Insurance Costs?
- Investigate higher deductible levels. A low deductible probably means you are actually pre-paying losses.
- Keep your claim activity to a minimum. Claims do occur, and that’s why you purchased the insurance coverage. However, insurance programs are not maintenance policies. Perform regular safety inspections to minimize slip and fall or other bodily injury claims.
- Ensure that steps and walkways drain well and are free of slippery items like slime, snow, and ice. Skid strips on stairs can reduce slip and falls.
- Educate your tenant on interior safety. Most fire losses are caused by kitchen fires or electrical fires from faulty devices, improper extension cords, or overloaded receptacles. Something as simple as setting a timer can reduce the risk of kitchen fires. Owners or their staff should respond quickly to any notifications of faulty stoves, refrigerators, and ovens. Space heaters are notorious for starting fires and should be prohibited. So keeping the HVAC system serviceable is a must. Make sure fire extinguishers are present and working. Stopping a small fire can eliminate a big loss.
- Do safety inspections on all properties quarterly. Loose railing, deteriorated steps, uneven sidewalks, and uneven ground are all liability claims just waiting to happen. Security cameras can help determine the party at fault for a liability claim. Unfortunately, fraud is very prevalent in liability claims.
- Show best practices, and insurance carriers will show you the best rate!
When you have a potential loss, make sure you have on file:
- An incident report with witness information and a detailed description of loss.
- Take pictures immediately.
- Make sure claim reporting is done quickly.
- Take measures to prevent the property from further damage.
Your tenants know when you are paying attention to details. Attention to detail will do more than anything to reduce losses that are real or are attempted fraud. Insurance carriers look for clients that have a loss to premium ratio of 40% or less. Eliminate the small losses, so the insurance program is there to protect you from catastrophic or large losses. Prevention of claims is the best way to achieve the best insurance rates.