Property cover to see changes
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Property risk management experts offered their predictions for what insurance changes commercial property owners might expect in the near term from the insurance industry as a result of the October storm.
• AL TOBIN, New York-based managing principal of Aon Risk Solutions' property practice: “There's going to be more flood insurance sold in 2013 than there was in 2012. I think there are going to be a lot more insureds looking at that type of coverage, whether they were affected by Sandy or not, especially now that we've had two of these storms about 13 months apart.”
• JEFFREY ALPAUGH, Boston-based global real estate practice leader for Marsh Inc.: “Before this event, you had modeling which would take into consideration Tier 1 windstorm events, and that region stretched from Virginia down to Florida and over to Texas. Now there's been some talk about whether those models will take into consideration the Northeast region. That all would take some time, but there is some concern that these two back-to-back storms will impact those models.”
• DAVID FINNIS, New York-based executive vice president and national property practice leader for Willis North America Inc.: “The main change will be the territory where a named storm deductible will apply. That's going to be expanded. Some insurers already treat storm surge from a named storm as flood, and flood limits and flood deductibles apply. You're going to start seeing a lot more consistency from underwriters in the Northeast on that.”
• GINA HIGGINS, New York-based senior managing director of commercial insurance for Crystal & Co.: “You'll see way higher deductibles, longer waiting periods before an insurance policy kicks in and generally lower limit offers, so it's going to be up to property owners to do some more layering to their coverage. Those companies that underwrote large chunks of property in lower Manhattan will constrict their offering tremendously.”
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