Remarketing your insurance every year is not always a good idea. Agency Supervisor Gabrielle Fisher explains why.
Plenty of associations have it written in their bylaws that they will remarket, or “shop,” their insurance every year and will use three brokers to do so. They feel they are doing their fiduciary duty by doing this. It is not always the best idea to shop your insurance every year though, as the disadvantages can outweigh the benefits.
There are generally a limited number of insurance carriers that specialize in community association insurance, and different carriers have different niches. Depending on the size of your building, what updates have been completed, and the life safety the building does or does not obtain- such as emergency lights and illuminated exit signs- there may only be three to four carriers willing to provide you with a quote.
After seeing submissions over consecutive years without getting a binding order, or binding the insurance one year only to lose it the next, insurance carriers and even insurance brokers will eventually stop providing quotes. Both are looking for stability and continuity. They know if you are remarking your insurance each year, insurance is being treated like a commodity and there is little chance to build a relationship. You want to know that these carriers and brokers will be there when you need them.
Our suggestion is to remarket your insurance every three years, unless you are facing a large rate increase (generally 10% or more), or if your current insurance company is canceling your insurance. When you bring in brokers to compete with the incumbent, select brokers who specialize in community association insurance, not the broker down the street because he is your neighbor’s brother and has an insurance license. You wouldn’t go to the podiatrist if you needed brain surgery and it’s no different here. Deal with specialists.
For more information, please contact us.