Property owners need to be protected from the elements, from bottom to top. Flood coverage is one thing, but protection from wind and hail is also an important sell.
Insurance Business asked Andrew Branoff, president and CEO at Apartment Insurance Consultants in Austin, TX, to speak about the importance of wind and hail coverage, and the brokers’ market for sales.
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Why is hail and wind insurance important?
The need to replace a roof is one of the single largest expenses a property owner can incur. Furthermore, a roof loss can lead to interior water damage and mold – which can cause loss of tenants and loss of rental income. In addition to having insurance it is important for property owners and managers to conduct regular roof inspections and budget accordingly for repairs to avoid deferred maintenance.
Who needs it?
All property owners and managers should have wind and hail insurance for their properties as you never know when and where the wind will blow or hail will fall. However, locations in coastal areas are much more prone to a wind event such as a tropical storm and hurricane as are locations in inland convective storm areas which are more prone to non-named wind-hail storms and tornadoes.
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What should brokers and agents know about selling these products?
It is important to know that windstorm coverage and deductibles can vary. Coastal locations will likely have a named storm deductible in addition to a wind-hail deductible. Deductibles can apply on a per location, per occurrence basis, on a per building per occurrence basis, on a per client per occurrence basis, etc.
What is the market like for hail and wind insurance?
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. 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.
Is this insurance needed by all apartment owners, or is this specifically for areas with a lot of wind and hail problems?
Certain geographic areas that have less wind are therefore less prone to a wind event; however, those locations should still be advised to buy windstorm coverage to protect against an unforeseen event and in most cases the property owners’ lender will require windstorm coverage regardless of geographic location.
Related stories:
2016 one of the “most severe” hail seasons in history: Report
Total estimated damage from spring hailstorms nears $700 million
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