Meet Chase!
Chase is our real estate insurance specialist. Chase has a wealth of knowledge in the real estate area and works frequently alongside mortgage brokers, commercial investors, property management owners, industrial property owners, and more. Check out the video below!
Protect your investment with the right coverage.
When you own commercial real estate in Winston-Salem, NC, it’s all about maximizing your investment. But without the proper real estate insurance coverage, an unexpected disaster can leave you taking a major loss.
So how do you make sure you’re properly protected—at the proper price? Chase Smith, our local real estate insurance expert, shares his answers to the four most common questions he gets on the topic to help you make informed insurance decisions.
- What is a ‘hard market’?
- How do you determine replacement costs?
- What insurance companies do you write with, and do you write in other states?
- What can I expect when I work with Alliance for my real estate insurance?
1. What is a ‘hard market’?
A ‘hard market’ is defined as the upswing in a cycle where insurance premiums increase and coverage capacity shrinks—meaning insurance gets more expensive. Insurance companies tighten their underwriting standards and raise their rates during a hard market.
A hard market can happen for a variety of reasons. At the time of posting this we’ve seen substantial increases in property value, the cost to rebuild, and labor. We’ve also seen a number of recent natural catastrophes (hurricanes, earthquakes, etc.).
Insurance companies are dealing with higher costs and higher numbers of claims, which they need to find ways to pay for. One way they do this is called reinsurance. Reinsurance is insurance for insurance companies (starting to feel like Inception’s ‘dream within a dream’ yet?). It kicks in if someone files a claim that’s higher than the insurance company wants to pay, protecting them from financial losses.
‘Reinsurance capacity’ is the total amount of reinsurance money available in the market. When it dwindles (as it is now), insurance companies are less willing to dole out policies at lower prices and broader guidelines.
So what does this mean for you? Well, if you’re the type of person who consistently shops around your insurance policy for the lowest price, you might want to be careful. Chronic shoppers generally don’t see positive outcomes in a hard market for a few reasons:
- Chronic shoppers who prioritize low prices may not find the affordable rates they are used to and may have to pay higher premiums for the same coverage.
- Chronic shoppers who frequently switch insurance providers may find it harder to obtain coverage from insurers who prefer long-term customers with a more stable risk profile.
- Chronic shoppers who prioritize low premiums may not realize that they are taking on more risk and may face significant financial losses if unexpected events occur.
2. How do you determine replacement costs?
This is a very common question. Most insurance policies are written as replacement cost—i.e. the value of the policy is equal to the cost of replacing the damaged property.
In order to determine the amount, we try to see if the client has gotten any recent appraisals, inspections, etc. of their property to accurately determine its value. We then utilize construction data to determine the cost of materials and labor that would be needed in the event of a rebuild. The cost of permits and fees that may be needed for a rebuild is another factor we consider.
But what if replacement costs change over time? Your insurance policy can be adjusted to accommodate the increase. It will mean a typically small increase in your premiums. That’s why we review our clients’ policies annually to ensure they’re properly covered and make adjustments if need be
3. What insurance companies do you write with, and do you write in other states?
We’re a full-service independent brokerage, so we represent around 100+ different insurance companies. Right now we’re writing in around 30 states. Ultimately, our focus is on pairing you with the carrier that provides the strongest protection for you as a client.
4. What can I expect when I work with Alliance for my real estate insurance?
As mentioned, Chase specializes almost exclusively in real estate and property insurance, which helps us stand out among other providers. We leverage our deep knowledge of the industry, our awareness of the latest trends, and our experience navigating the process to provide our clients the best experience possible.
Don’t risk significant financial losses by not having proper insurance coverage for your commercial real estate investment in Winston-Salem, NC. Contact Chase today.