Following a year-long reset the E&S market is stabilizing in 2024. However, it remains crucial that retail agents adhere to property submission best practices when pursuing optimal property coverage to meet their clients’ unique needs. These practices can help streamline the placement process and mitigate potential errors and omissions.

COMPLETE + ACCURATE APPLICATIONS

The importance of submitting complete and accurate applications can’t be overstated. At a minimum, agents must include essential information outlined in the application to obtain a quote, such as:

• Construction Type
• Number of Stories
• Structure Square Footage
• Building Improvement Dates/Info for:
  • Wiring
  • Roofing
  • Plumbing
  • HVAC

Incomplete or inaccurate applications can lead to discrepancies between the coverage sold and what was actually bound, (i.e. special cause of loss form vs. basic), potentially resulting in errors and omissions (E&O) issues. Discrepancies, such as misrepresenting the level of coverage, can also lead to confusion during claims processing and may result in financial implications for the insured as well as the agent and wholesale broker.

Ensuring applications are correct and complete from the start minimizes back-and-forth communication with underwriting and also provides an opportunity for agents to make sure policyholders understand their coverage, thereby reducing misunderstandings at the time of a claim.

IDENTIFYING POTENTIAL HAZARDS

Additionally, agents should be proactive in obtaining necessary inspections to identify potential hazards and ensure compliance with carrier requirements. Inclusion of inspection findings related to electrical systems are of particular concern, as some panels have been deemed unsafe by carriers. When a property’s electrical system is prohibited from coverage, it can be a costly fix depending on the size of the building. Agents may find that sharing educational pieces around concerns like outdated electrical panels helps property owners better understand the potential danger.

COMMON ELECTRICAL CONCERNS FOR UNDERWRITING:

• Federal Pacific, Federal NOAR, or Federal Pioneer Panels
• CStab-Lok Electrical Panels
• Murray/Siemen Panels
• Zinsco Panels, including GTE-Sylvania-Zinsco Branded Products, Challenger, and Split-bus Electrical Panels
• Knob + Tube Wiring
• Aluminum Wiring
• Fuse Boxes Present Instead of Circuit Breakers
• Wiring on Circuit Breakers with Less than a Minimum of 100AMP Service
• Panels, Load Boxes, Breakers, or Wiring System Under a Known or Suspected Recall

If a property inspector recommends further evaluation by an electrician, then a licensed electrician must typically sign off to clear that recommendation. However, the panel or breakers don’t automatically require replacement unless subject to a recall or otherwise deemed unsafe by an electrician. However, underwriting older building is often more complicated because the electrical information is often unknown until inspected.

ADDITIONAL UNDERWRITING CONSIDERATIONS

In addition to completed, accurate applications and details of any known potential hazards, underwriting also wants to see a consistent Statement of Values (SOV) containing crucial details such as:

• Address
• Year of Total Roof Replacement
• ISO Code
• Building Value + Contents
• Percentage of Sprinklered Area
• EIFS Information
• Protection

Inadequate information may result in delays or outright denials from underwriters. Moreover, it’s vital to provide a comprehensive loss history, including details of any open losses and mitigation measures implemented by the insured. Awareness of the expiring policy’s details, any significant changes, non-renewal indicators, pricing, and deductible structures is essential for a successful renewal strategy.

The Property Analytics tool within our REDY platform empowers CRC Group to enhance your existing Schedule of Values (SOV). It identifies gaps, fills in missing information, and provides additional underwriting characteristics using third-party data. All of this is done instantly, right at your desk, streamlining market selection and pricing.

BOTTOM LINE

Submission consistency is key. Providing complete and correct information initially saves valuable time, as underwriters typically cannot revisit an account multiple times. Developing submissions in alignment with best practices can help ensure policyholders have the best possible opportunity to obtain optimal property insurance. Collaborating with knowledgeable wholesale brokers with access to a wide range of markets also enhances the ability to secure favorable terms, particularly in challenging market conditions. Reach out to your local CRC Group producer today.

CONTRIBUTOR

• Destinie Kindle is a Team Leader with CRC Group’s Fort Worth, TX office.

END NOTES

1. U.S. Fire Administration, Residential Building Electrical Malfunction Fire Trends (2012 2021)
2. Commercial Buildings Have Gotten Larger in the United States with Implications for Energy, U.S. Energy Information Administration, December 3, 2020