Why comply with loss recommendations rather than just placing coverage with another insurance carrier? Well, it’s not that easy. Most carriers, including non-admitted carriers, will require many common loss recommendations. I’ve seen a few situations lately where a carrier is non-renewing due to noncompliance with loss recommendations. Although no one ever wants to run out for a bid to fix a sidewalk or add a handrail, thinking a different carrier won’t share the same concerns is not the case.
Sometimes, the loss recommendations carriers want can be a stretch, or they might be difficult to work on due to extenuating circumstances (like weather or other ongoing projects interfering). However, avoiding the recommendations and thinking you can transfer to another carrier will end up costing you more. As I’ve said many times before, premiums are high all around. Everyone is shopping for a more competitive option. Due to the number of submissions carriers get, they are fine picking and choosing what they take on. Carriers have tightened their guidelines and become very strict, and one of the many questions they ask brokers is, “Have there been non-renewals in the last few years?”
If we are coming off a non-renewal and trying to find a replacement with a new carrier, the new carrier will request a copy of the non-renewal and what happened. “Why wouldn’t the carrier renew coverage?” If the non-renewal reason is due to noncompliance of loss recommendations, the new carrier will not provide a quote without the recommendations being completed for them as well. In the past, the new carrier may have given the building some time after binding to get the recommendations done, but lately, the new carrier won’t provide a quote without seeing the proof that the original recommendations were completed.
In addition, many carriers will simply decline, as they are not interested in taking on an insured that was non-renewed or doesn’t want to comply with their carrier’s requests. If there is a lapse in coverage due to the non-renewal, even more carriers will decline to quote. That leaves the non-admitted market, which is helpful for harder-to-place risks, but the cost can be nearly double or more. Brokers also don’t have as strong of a relationship with non-admitted carriers, making it more difficult for them to go to bat for your building.
Also, remember that the carriers are trying to reduce liability exposure, both for the property and themselves. It can only help make your property or Community Association as safe as possible. A lawsuit over a trip-and-fall would be far more costly than fixing the curb. Your best bet is to be honest with your broker about the timeline or issues, start looking into the recommendations immediately, and provide as much documentation and detail as possible. The more we provide to the carrier on the compliance status, the more flexible they can be. Switching carriers to avoid recommendations may have worked in the past, but it could cost you a lot more than a new sidewalk these days.
Reach out to me with questions anytime; I’m always happy to help.
