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6 Key Characteristics of a Commercial Real Estate Insurance Consultant

Protect Your Assets with Commercial Real Estate Insurance Consultants

Navigating the commercial real estate landscape is complex enough. Eliminate some of your stress and financial risk by hiring a commercial real estate insurance consultant.

As your portfolio changes over time, you want an experienced, competent insurance consultant on your side. You want someone you can trust to remove gaps in your coverage, to secure you the best insurance terms, and to continually monitor and adjust your policies. If you’re looking to hire this position, here are the top qualities to consider in your vetting process.

What to Look for in Commercial Real Estate Insurance Consultants

As you’re considering potential commercial real estate insurance consulting firms, check for these essential traits.

  1. History in Real Estate
  • Even a commercial insurance consultant with decades of general experience could be a poor fit for your business. Look for specific experience in the commercial real estate insurance industry.
  • Knowing the real estate industry firsthand means your consultant has a deep understanding of how policies, laws, and contractual banking obligations work together. From there, they know how to design the best insurance program possible within that environment.
  • They also understand key challenges for real estate owners in the current insurance market.
  • Experience with Valuations
  • Inflation and rising construction costs are dramatically affecting building valuations.
  • A building that was considered $100 per square foot could now easily be assessed at $125 to $150 per square foot.
  • The result? Insurance companies are compelling the insured to increase the stated values of their buildings.
  • “This automatically results in a twenty-five to fifty percent premium increase, even before any rate increases,” said Mitch Davis, lead commercial insurance and risk management consultant at MB Davis Group.
  • “These kind of percentage increases, and more, are not uncommon. We’re seeing this with all our clients, at every level of the real estate market.
  • “Your insurance consultants must be able to anticipate and to manage this process.
  • If they don’t, real estate owners will find themselves confronting unexpected, last-minute, dramatic increases in both building valuations and premiums.
  • Experience Navigating Capacity
  • Hurricanes. Earthquakes. Floods. Wildfires.
  • Billion-dollar catastrophes are on the rise, and they are transforming the commercial insurance market.
  • The biggest effect? A continuing diminishment in capacity.
  • Because many investors are choosing right now to put their capital in more lucrative places than insurance companies, there is a worldwide shortage of property insurance coverage.
  • Clients with large portfolios or high-valued buildings in a concentrated location are struggling to fulfill all their insurance needs with one insurance company.
  • Insurance brokers are struggling to get a syndication (multiple insurance companies) to jointly insure the same buildings. The resulting insurance programs are complex and often significantly more expensive.
  • Experienced, knowledgeable insurance consultant can help mitigate this situation.
  • Bring a broad, deep view of the commercial real estate insurance landscape. With their experience, consultants have a bird’s-eye view of the market. They can objectively assess which programs will work together to offer you full coverage at the most beneficial price point.
  • Anticipate and get in front of the process. Complexity and increasing costs are part of the real estate insurance landscape today. The best way to deal with it is by anticipating issues as early as possible. A consultant’s industry knowledge and experience help you see problems coming down the road with enough time to react and to plan.
  • Communicate the right information to the insurance companies. Do your buildings and properties have unique features that help protect them against fire, storm, or other types of loss? An insurance consultant can walk the insurance companies through these features. An experienced consultant knows which features will have a discernible impact on an insurance company’s terms, rates, and premiums.
  1. History in Real Estate
  • Experienced, knowledgeable insurance consultant can help mitigate this situation.
  • Once you’ve narrowed down your list of potential insurance consultants to those with specific real estate experience, then you want a consulting firm that brings years of commercial insurance expertise.
  • This helps ensure your consultant can deal with all your commercial real estate situations. No matter your circumstance, you want someone who can quickly and effectively navigate today’s complex insurance landscape.
  • That includes:
  • Anticipating insurance issues and policy changes that could affect you
  • Coordinating multiple insurance programs to ensure no gaps in your coverage
  • Continually monitoring and refining your policies as your needs change, ensuring you’re always getting the most complete coverage for the best terms
  • Ask about a consulting firm’s experience in the following:
  • Due diligence throughout acquisitions
  • Contract negotiations with management companies, as well as lease and financing negotiation
  • Insurance-related issues around development, remodels, tenant fit-ups, and construction
  • Windstorm and flood coverage in high-risk areas
  • High-risk tenants and high-exposure occupancies
  • Property-specific loss management
  1. Follow-Through and Dedication to the Account
  • Commercial real estate insurance is not something you select and then never revisit.
  • The insurance landscape is always in flux. As you buy, sell, or otherwise amend your asset portfolio, your insurance-related needs are also always changing.
  • During these times of transition, the last thing you want is to get caught with any devastating gaps in your coverage.
  • Ensure the insurance consultant you secure has the organization, proven processes, and attention to detail to assess and to update your policies as needed.
  1. A Personalization Mindset
  • Any given asset portfolio could span different geographies, building types, and contractual obligations. This means every commercial real estate insurance situation is unique.
  • To obtain the most cost-effective, risk-reducing insurance for you and your business, it often requires the coordination of multiple insurance programs. In that complex of a landscape, no insurance consultant should be offering blanket or cookie-cutter solutions.
  • Quality consultants should first offer a thorough audit of you, your business, and your current asset portfolio. From there, they should provide custom, tailored solutions and recommendations to suit your exact situation.
  1. Objectivity
  • An insurance consultant is not the same as an insurance broker.
  • A broker often works on commission and has a financial incentive to push particular plans and companies—even if those plans and companies don’t represent the best insurance program for you.
  • Consultants, on the other hand, have no such financial incentive. Their fee structure is set and independent of the specific policy or policies you choose.
  • In many ways, insurance consultants act as an in-house insurance department. This leaves you time and energy to focus on running your business rather than worrying about your insurance coverage.
  • To ensure optimal objectivity in your insurance selection process, choose a consultant over a broker. Just confirm that consultant has strong, deep relationships with national and regional brokers that you can leverage to your company’s advantage.
  1. Risk Management Program
  • A qualified insurance consultant has a comprehensive view of risk management. This includes thorough, organized, process-driven risk management audit services.
  • By reviewing all your company’s potential exposures, insurance consultants can anticipate problems before they happen, saving you time, money, and stress.

Commercial Real Estate Insurance Consultants Offer Peace of Mind with Your Asset Portfolio

Do you want expert guidance navigating the complex commercial real estate insurance landscape?

Do you want to eliminate the stress, time, and energy of ensuring your real estate asset portfolio is protected in a thorough, cost-effective way?

Then schedule a consultation with MB Davis Group today.

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