FacebookTweetLinkedInEmailPrint Multifamily property insurance premiums are starting to show signs of leveling off — and in many cases, even trending downward—offering a welcome shift after the recent market volatility.However, these rate decreases are largely dependent on location and individual risk profile.Costs are expected to remain up in more high-risk-prone regions, particularly in states like California, Texas, and Florida.

Many of these risks will still not be eligible for admitted carriers and will instead have to seek coverage or remain under the non-admitted marketplace.THE TRUTH ABOUT NON-ADMITTED INSURANCE CARRIERS While many landlords in high-risk areas or with high-risk properties are familiar with non-standard markets, many are newer to these options and can experience some hesitation or even fear.That being said, if the opportunity is available, placement with a standard admitted carrier is generally preferred, simply because if a carrier were to go insolvent, claim payouts would still be guaranteed.

But for larger non-admitted markets (think Lloyds of London, Zurich), many, if not most of them, are still just as financially stable as the admitted markets.As a result, if your property falls outside standard market guidelines, securing coverage in the non-admitted market can still be a sound and reliable option.TO HELP ALLEVIATE THE UNKNOWN, HERE ARE A FEW KEY ITEMS TO KEEP IN MIND ABOUT NON-ADMITTED INSURANCE COVERAGE: 1.

Non-admitted markets aren’t inherently bad! These excess and surplus carriers are no longer just for niche, high-risk industries, and are now covering any risk deemed out of the standard market insurers’ appetites.If you are on a master policy, most of those have the backing of non-admitted markets.2.

Non-admitted markets aren’t necessarily going to be that much more expensive than admitted markets.It will come down to the characteristics of each individual risk.Some non-admitted markets even end up being less expensive.

3.Non-admitted markets can cover perils that admitted markets won’t! Because the nonadmitted markets don’t have to work within the confines of state regulations, they are able to customize coverage, making them a bit more flexible in their policy offerings.WHAT INSURERS LOOK FOR BEFORE OFFERING STANDARD COVERAGE If your properties end up only being eligible for non-admitted market options, your agent should be able to address any additional concerns you may have.

It’s worth having an open, honest conversation about whether admitted options are available or what steps, if any, you can take to improve eligibility.While you can’t change your property’s location, focusing on controllable factors can make a meaningful difference.ATTRIBUTES THAT ADMITTED INSURERS LOOK AT WHEN CONSIDERING WHETHER TO OFFER COVERAGE INCLUDE: • Age of the buildings (Most admitted carriers prefer newer builds under 30 years old) • Type of construction (non-frame structures tend to get better rates) • Clean and tidy properties (those with a high focus on building and ground maintenance) • Properties that are adopting newer building codes and are updating older building systems (wiring, plumbing, and HVAC) • Properties that go above and beyond what is legally required for safety (sprinkler systems, central-station fire alarms) • Properties requiring tenants to carry renters’ insurance (prevents landlords from covering claims that are outside of their scope of liability) • Low or no claims within the past 5 years   Higher deductibles are going to remain common throughout both standard and non-standard markets.

Most carriers are shifting away from covering the smaller claims, which can ultimately benefit landlords by preserving a cleaner claims history.On the flip side, we are now entering a harder market for liability insurance, so be prepared for general liability and excess liability/umbrella policy premiums to increase.This increase is due to additional rating factors such as area crime scores, as well as increased instances of lawsuits against landlords.

In addition to rising liability premiums, landlords should also anticipate increased restrictions on liability coverage.Many carriers are limiting or excluding protections in higher-crime areas, particularly for exposures such as assault and battery, sexual abuse, firearms, and habitability.At the same time, many major lenders are still requiring these coverages to be maintained.

As a result, property owners may need to secure separate policies to meet these requirements, which can lead to additional costs.Also, keep in mind that excess liability policies will follow the underlying policy forms, so if it’s excluded in the underlying general liability policy, it will be excluded in the excess liability policy.WORK WITH THE RIGHT INSURANCE PARTNER When evaluating potential new investment opportunities, set yourself up for success by partnering with an agency that stays on top of market trends so you can make informed decisions with guidance from experienced professionals.

With the right guidance, the insurance process becomes far less daunting, providing confidence that your assets are properly protected.Before renewing your policy, it’s worth taking a second look.AAOA members can get connected with brokers who specialize in rental properties and have access to a broader range of carriers than most agents.

Even a quick comparison can uncover better coverage or pricing.Click here to get help shopping for better insurance.Click Here for full articleClick Here to learn more about AAOA FacebookTweetLinkedInEmailPrint