More people are making claims on their homes in Florida than in any other state. Unfortunately, The Sunshine State leads not only in population growth but also in soaring homeowners insurance rates and claims litigation. Those trends have combined to create widespread turmoil in Florida’s property insurance market that the State is now seeking to quell with a reform package. On Dec. 14, 2022, Florida Governor Ron DeSantis signed property insurance reform bill Senate Bill 2-A into law. The new law seeks
to cut down on lawsuits while mandating that insurers process and pay claims faster, but property owners will also have to take a more active role. This means partnering with knowledgeable wholesale brokers able to provide guidance on how the reform law impacts property owners will be more important than ever.

Historically, floods, hurricanes, and earthquakes have been known for generating historic losses and headlines, but the insurance industry is increasingly concerned about the mounting financial impact of so-called secondary perils. Hail storms, tornadoes, thunderstorms, and wildfires are causing more frequent and severe losses that mount into the tens of billions of dollars on an annual basis, often outweighing losses from major perils in recent years. Over the last 40 years, a pattern of more frequent natural catastrophe events has emerged, a trend that has further accelerated over the last decade, according to AM Best (source 1).

Clients who want to better manage the costs of their property programs often look to higher deductibles as an attractive option, but their lenders may not allow it. Higher deductibles can bring significant cost savings on property insurance programs, particularly for higher hazard risks or accounts with unfavorable loss histories. Taking higher deductibles provides access to more competitive markets and can lead to the most cost-effective property program. Clients willing to take a $100,000 deductible, for instance, will draw far more interest from more markets than those insisting on a $10,000 deductible.

The stresses that had been building in the California earthquake market have begun to ease. The momentum of rate increases has slowed, although high-risk zones and older buildings remain challenging. Capacity has improved as carriers see a better risk-reward outlook after the significant rate increases of recent years. Higher deductibles are part of the changing landscape, due to pressure from carriers, but also as a means for buyers to manage premium costs. In an evolving market, working with a knowledgeable broker with broad access to markets and in-house modeling expertise can help buyers achieve better results.

The 2020 hurricane season stormed in with a record six named tropical storms by early July. But in addition to forecasts for an active storm season, coastal homeowners from Florida to Texas are facing sharp rate increases as insurers seek to rein in catastrophe losses. Carriers are tightening underwriting guidelines, limiting capacity and, in some cases, pulling out of markets. Rate increases are particularly steep in South Florida’s tri-county area, but Gulf Coast homeowners from Florida to Texas should also expect higher premiums and increased deductibles as well as fewer options for wind coverage.

The 2020 hurricane season is upon us and scientists are already making their predictions. Scientists’ early predictions indicate an “above-average” hurricane season in 2020*. The consensus of expert forecasts indicate 17 named storms for this year’s North Atlantic hurricane season – much higher than the long-term 30-year average of 12 storms. Are you ready for this year’s hurricane season? Here is a list of hurricane claim guidelines you should consider as part of the preparation for dealing with a storm. From the first steps you should take after an event, to the different types of claims scenarios, CRC Group provides you with the information you need to adequately prepare for a storm.

The earthquake market has moved onto unstable ground as insurers and alternative capital investors demand higher returns on their capital. Rate increases have ramped up over the last year, and buyers should expect higher prices this year for the same coverage. Higher deductibles can be an effective strategy to manage premiums. Buyers who can provide better and more detailed information on their risks can expect a better reception from underwriters. Early and active marketing and working with a broker that offers broad access to markets are crucial for obtaining the most cost-efficient coverage.

The severe hurricanes and record-breaking wildfires that have caused widespread damage in recent years have heightened concerns that a changing global climate may be leading to more frequent and extreme natural catastrophes. Among the possible effects of climate change, stronger and slower-moving hurricanes may bring more devastating winds, higher storm surge and greater inland flooding; hotter temperatures can dry out vegetation and raise the risk of wildfires, particularly as people move into formerly wild areas. Those changes may lead to greater risks for property owners and higher-than-expected claims for insurers.

Parametric insurance has made its biggest impact so far with catastrophe bonds covering large-scale risks, such as hurricanes and earthquakes, but the concept is becoming more common in commercial and residential insurance. It’s called parametric because rather than responding to a specific loss, the coverage pays out when an agreed “metric” such as wind speed or ground shaking reaches or exceeds certain intensity. Insurers are offering such coverage based on a wide variety of other metrics, including barometric pressure, rainfall, average snowfall, river water levels, storm surge as measured by tide gauges and even hotel occupancy rates.

Insurisk is CRC Group’s exclusive products facility has recently launched CAT+, an A rated property capacity for middle market business that is primarily CAT-exposed. CAT+ can accommodate costal exposure risks from Texas all the way to the Carolinas.

Earthquakes get the headlines, but the ground moves for many reasons. Whether a property loss is covered when the ground shakes, shifts or sinks depends on what the policy says. Earthquake coverage is a very well known, but relatively narrow coverage limited to damage caused by naturally occurring seismic activity. Few buyers are aware of earth movement coverage, which offers broader protection for a wider scope of perils. While most clients choose earthquake coverage, they may want to consider whether earth movement policies make sense, given their specific risks and how it fits into their overall property program.

Buyers have grown used to price cuts in the property market in recent years, but insurers are now taking a harder stance. Insurers are seeking additional premium wherever possible and applying stricter underwriting, particularly to property valuations. Rate increases seem to be gaining traction as leading markets pare back on unprofitable lines. Still, those viewed as good risks can expect to do better than more challenging exposures.

The Catastrophe Risk Assessment Report is a proprietary tool developed by CRC Group’s Property experts to help retailers win with their clients. Exclusive to CRC Group, this report helps deliver an attractive and detailed presentation providing quality mapping and analytics with comprehensive location details and analysis to your insureds. It includes a summary of an account’s exposures aggregated a number of ways, including by CAT zones, State, flood zone, and construction type.

Hurricanes dominated the headlines last year, but away from the coast, massive losses from thunderstorms, tornadoes, and wildfires continue to roil the property markets. Insureds that have become used to price cuts on non-coastal, non-cat driven business, now face possible rate increases and likely larger deductibles.
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Our special report "Away From the Coast - Rain, Wind and Fire Roil Property," provides valuable information about market conditions away from the coast and shows why you should avoid neglecting these non-coastal accounts.
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And as always, as hurricane season gets underway and is forecasted to be normal or above-normal, the experts at CRC Group are here and ready to help.