With one major hurricane having already wreaked havoc on Houston, all eyes are on the Atlantic as warm surface temperatures are expected to boost storm activity. How can multifamily managers and owners best prepare their properties and residents for these powerful storms?
MFE tapped Ali Pool, vice president of Insurance Office of America, for her top advice on coverage and preparedness.
How can managers/owners know their communities are covered during a hurricane?
An annual review of coverages, limits, deductibles, and limitations of their current insurance program with their broker should be mandatory.
What are some top tips for ensuring coverage for hurricane season?
Carriers are more particular with underwriting guidelines than ever before, so it is more important than ever to be in communication with your insurance broker to be properly prepared. For example, it is important to discuss what carrier roof minimums are. Some carriers are mandating that roofs be less than 15 years old—or in some cases less than 12 years old—to qualify for insurance coverage. It is important to have consistent communications to follow carrier market expectations so that decisions, such as pursuing a new roof, can be evaluated on properties.
What are some concerns/challenges the insurance industry is facing as we enter what is expected to be a very active hurricane season?
Capacity in coastal areas continues to be a concern and challenge. Fewer carriers are willing to insure coastal properties. With supply and demand, this leads to higher prices and more restrictive terms—such as higher deductibles and exclusions—for customers.
What’s your go-to advice for those who are shopping for coverage?
Address anything you can control. This includes new roofs, window protection, tree management for loose limbs and older trees, as well as safety features. You cannot control the age of your building or where it is located, but if you address what you can to put your property in the best possible light for carriers, insurability and pricing will be positively impacted. All updates and measures taken must be communicated to your insurance broker. Your broker needs to have accurate information to communicate to underwriting why your risk should be categorized as best in its class.
How can community managers/owners best prepare for an impending storm?
Establish a checklist of to-do items. Below is a simple list I provide to clients along with suggestions:
- Perform all routine premises checks and updates prior to hurricane season—this includes inspecting equipment, checking roofs, securing A/C units, testing emergency lights, filling generators, trimming trees, and more;
- Decide where outside items, such as pool furniture, will be stored;
- Create a checklist for what must be done on-site if evacuation of the premises is necessary;
- Create and distribute a checklist for residents so they are aware of their responsibilities in the event of a storm and after the storm;
- Secure supplies for temporary repairs, such as tarps and plywood—these items will be difficult to obtain after a storm;
- Create and store a hurricane supply kit including the following:
- Hurricane emergency supplies: generator with fuel, first aid kits, bottles of water, bungee cords, trash cans, spray paint, gloves, utility knives, chainsaws, extension cords, fans, duct tape, batteries, took kits, rope, walkie-talkies, flashlights; and
- Unit owner and renter list with phone numbers.
- Store a basic insurance data sheet including agent name, contact information, property and wind carrier name, and policy number;
- Create and store basic vendor contact information including insurance agent, attorney, CPA, bank, disaster repair/cleanup team, roofer, plumber, etc.;
- Create and store a local and national resource contact information sheet;
- Create and distribute evacuation routes to residents;
- Prenegotiate service contracts with an emergency/disaster company, debris removal company, security team, etc.; and
- Make arrangements for a line of credit to fund salaries, hurricane deductibles, immediate expense needs, etc.
This checklist needs to be simple and not a dust-collecting paperweight on your desk. It needs to be a living, breathing document that is constantly updated and created specifically for your property.
Is there anything you’d like readers to know about insurance?
It is important to do business with a true insurance partner—someone that is familiar with your property. It is hard to properly insure a risk without evaluating the risk, so it always helps to do business with a broker who is willing to put boots on the ground. Commercial insurance programs should consist of more than just emails and phone calls.
