26 Jul How to COPE in the Competitive Property Market
We understand the struggles of dealing with a competitive property market. When accuracy and time are factored in, it’s important to be sure you’re getting all of the information you need upfront. But don’t worry, we can help you COPE!
For the best and most efficient quote, these four cornerstones of property underwriting are pivotal for your property application: Construction, Occupancy, Protection and Exposures (COPE).
Construction, one of the most important elements in your assessment, covers the three main components of the property: the construction materials, the square footage and the age.
1. Assess the construction of the building to ensure it is constructed with high-quality materials that have high durability and low combustibility. It’s important to class the building construction correctly. The rates for the different construction types are based on the damageability from a covered peril. Verification of the construction type prior to binding will prevent any issues when the inspection is reviewed.
Building construction types:
Frame = wood construction
Joisted Masonry = unreinforced concrete block masonry
Non-Combustible = light metal frame
Masonry Non-Combustible = reinforced masonry
Fire Resistive = reinforced concrete with metal studs.
2. The square footage will determine whether more safety features are necessary with larger buildings, or, in the case of less square footage, if the risk of a single loss on the entire building is possible.
3. Access the age of the building to get insight into the building’s major systems (HVAC, roof, etc.). Generally, the newer the building, the better the chances of it having up-to-date systems. With older buildings, it’s important to check whether these systems are being maintained, or if any have been updated, as the risk of a malfunction is much higher with dated equipment.
When looking at Occupancy, the second most important element, you’re looking to assess two particular parts: what the occupant does and how they mitigate risk. An office building will have less risks associated with it than an auto repair shop. With higher risk occupants, appropriate hazard assessment and implementation of risk management is important. Even on a Lessor’s Risk, it’s important to know the operations of the tenant (or if a warehouse, what’s being stored). This will make a difference on the acceptability of a risk.
Protection covers those situations lying outside of the owner’s control and relies upon the previous two elements, Construction and Occupancy. When looking at Protection, you’re assessing whether the building has sprinkler systems, alarm systems, fire extinguishers and other safety measures in place to help protect the business from any potential risks outside of it’s control.
Exposures assess more high-risk, uncontrollable hazards that could negatively impact the property. Exposures include but are not limited to: the risk of natural disasters, whether the building is in a flood zone, etc. Being aware of these potential hazards will give you a better understanding of the overall risk associated with the building.
By understanding these four pillars of property insurance, you will be able to better assess the risk and speed up the underwriting process and prevent any surprises discovered during an inspection. At Lane & Associates, we’re always ready to help you COPE along the way and provide you with a quick quote.