Mid Atlantic Real Estate Journal — 2013 Forecast — January 11 - 24, 2013 — C
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2013 F orecast
owmany real estate owner’s like to shop or bid their insur- By Robert D. Odell, CIC, Odell Studner More for less - How to buy better insurance protection for less premium and risk dollars? H
3. ALLOCATION EFFI- CIENCIES –You can allocate premiums based on carrier allocation, square footage, number of units, occupancy percentage, claims differen- tial or class of business. You can assist in determining the allocations rather than strict allocations provided by indi- vidual policies. The allocation can be a lot easier in a master program where everything is budgeted for up front and the insurance spent for each en- tity is known at the beginning of the policy period. 4 . COVERAGE EN -
HANCEMENTS – The ability to negotiate with one insur- ance carrier, one underwriter at one anniversary date will enable you to better negoti- ate coverage language that benefit you not the insurance carrier. Rather than purchas- ing a policy off the shelf, you will be able to customize and manuscript a policy for your benefit. 5 . BANG FOR THE BUCK – There are mini- mum premiums that can be avoided by negotiating with one carrier at one expiration date. The soft costs of pricing
an insurance product will be spread over 30 assets rather than one-offs. Imagine the time and effort your staff invests making sure two/ three renewals a month are renewed and accurate. When looking at real es- tate owners’ insurance, I always start with designing the broadest coverage, terms, and conditions while negoti- ating the most competitive pricing available. I want the insurance premiums working for the real estate owners not the insurance carrier. Some considerations today would
involve different types of as- sets, catastrophic concerns, claim frequency, and lender requirements. If when taking a look at all of these areas we agree it makes sense to roll all of the policies into a “Master Program” then that is what we would do. The bottom line is to always have an advocate working for you that not only understands insurance, but understands the “nooks and crannies” of the real estate business. Robert D. Odell, CIC is chairman of Odell Studner in Radnor, PA. n
ance? What if you owned 30 proper- ties and had 30 different expi rat i on dates? Think about it this way - When you shop for
Robert D. Odell
food or other household items do you shop at BJ’s or Costco and buy 30 items at one visit, or do you shop at Wawa or Rite Aid and purchase one item at 30 visits? Do you pay more on the one visit or pay more with 30 visits? I think using this analogy applies to purchasing a Master Insur- ance Program in paying less for one purchase! What is a “Master Insur- ance Policy” and what is the benefit? In property and liability coverage, it is the combining of partnerships, lo- cations and operations under one Master Insurance Policy, with one expiration date and with one payment schedule. For some, combining all of their coverages under one “Master Policy” may appear to be a waste of time and not a priority, however, I believe the benefits almost always outweigh the disadvantages. Let’s look at those Top Five benefits. 1. ONE EXPIRATION DATE – Having one expira- tion date enables the owner to make acquisitions and di- vestitures from their master program at pre-determined pricing. It puts the coverage under one insurance carrier to achieve economies of scale. This will eliminate duplica- tions, likely reduce insurance costs, probably reduce errors, and reduce your internal costs of managing the fragmented insurance program. 2. COVERAGE CONSIS- TENCY – You are determin- ing the terms, conditions and limits that you deserve, want, and need rather than simply just complying with lender requirements. This will keep you on consistent terms with your various partners. Cover- age is the nooks and crannies behind the limits of coverage and is vital for your asset protection. For example, ask your broker what are the vacancy provisions in your current program?
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ROBERT D. ODELL, CIC Chairman rodell@odellstudner.com 484-586-3907 (direct) 866.282.9742 (toll free) www.odellstudner.com
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