As the weather continues to heat up everywhere on the planet, insurance losses could well rise alongside the barometer. Global warming has led to wilder and worse storms, yet the insurance market for coastal properties has recently softened, according to one exec.
Andrew Branoff, president and CEO of Apartment Insurance Consultants, said that, despite the rise in temperatures and severity of storms that comes with that, the market is growing.
“The coastal windstorm market has recently softened, meaning more carriers and capacity has entered the marketplace for this line of coverage, causing pricing and deductibles to reduce. There are always new products entering the market,” he said.
“However, the inland windstorm market appears to be holding steady. The market is constantly changing so it is important to make an effort to stay current on market options and trends.”
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The market now – for coastal wind coverage and property coverage – is as competitive as ever, he said.
“While over the past couple of years the coastal property insurance market has been generally soft – meaning increased competition and reduction in pricing – many now consider the market to be slowly stabilizing with pricing beginning to flatten,” he said.
“From a macro standpoint, it is my understanding that carriers injected new capacity and capital into the property market in 2016, but at a lower level than prior years in 2015 and 2014. Carriers are expected to continue to fight to hold their market share for the remainder of 2017, resulting in a continued competitive market.”
And from a nuts-and-bolts level, when it comes to what particular risks coastal properties continue to face – and insurers continue to pay for – Branoff said the big item remains roofs.
“The need to replace a roof is one of the single largest expenses a property owner can incur,” he noted. “Furthermore, a roof loss can lead to interior water damage and mold. In addition to having insurance, it is important for coastal property managers to conduct regular roof inspections and budget accordingly for repairs to avoid deferred maintenance. Weakened shingles are more likely to be blown off by wind gusts exposing coastal properties to structural rot and additional damage.”
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