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  • Steven Fletcher

Grappling Insurance

Rising insurance costs seem to be prevalent in every market, not just those in coastal regions.

Our broker smokes Marlboro reds inside her home office and rips phone calls all day- she’s a rare breed with a vast network, and we’re happy to have her in our corner.

Insurance isn’t terribly difficult to understand but navigating the space can be a bit more difficult.

With that said, here’s how we approach property related insurance:

1.) Source the best brokers in each market (90% of the battle)

Each shop typically has access to the same insurance products, but some take the extra step and source other programs/avenues to add value for their clients.

Find these brokerages.

The second somebody says “it is what it is” or takes 2 weeks to respond with a quote, start looking elsewhere.

2.) Tell Our Story

People can’t help you if they don’t know what you’re looking for or need.

We indicate that we’re local to the market, own X properties in the area, focus purely on multifamily, and hope to get quotes as fast as possible.

Early on, we send over a few sample listings/properties to get them priced out.

We then seek out differences in coverages, pricing, and insurers between each brokerage.

We can quickly determine who has access to the best policies and an entrenched network, all while staying up to date on pricing.

3.) Position Ourselves Well

At the end of the day, it’s on us as property owners to withstand increases to all operating costs, let alone insurance.

If a jump in your insurance premium wipes out your numbers, there were likely missteps along the way.

We underwrite annual increases to each operating expense to ensure we can withstand them, while still generating the yields we need to justify our effort.

Also, be cognizant of the location of the asset.

Within the same city, some neighborhoods get crushed by flooding while others don’t have to deal with it.

Insurance pricing will vary accordingly.

4.) Stay Tight

Always look to cut costs wherever you can (this isn’t to say policy coverages).

If your broker has good relationships, there can be opportunities to lean on them for better pricing.

Many people receive the annual renewal, gloss it over, sign it, and continue with their business.

We look to confirm that we’re receiving the best possible terms and pricing each go around.

It’s a mutual relationship, there’s give and take and it’s always worth inquiring about.

If they can’t save you money on the policy right now, they may know of a building fortification program that may in the future.

Seek out every input you can.

It all comes down to sourcing the best talent and then leveraging it to ultimately protect us and the assets we’ve worked so hard to acquire.

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