Because ongoing inflation issues have the potential to result in heightened premium costs, coverage restrictions and underinsurance concerns, it’s important for policyholders to do what they can to minimize such complications. Some steps that insureds can take include the following:
- Have policy renewal conversations early. Especially amid these challenging market conditions, policyholders should work with their trusted insurance professionals to discuss the coverage renewal process well in advance. Doing so will allow insureds to stay properly informed on the latest inflation trends and give them ample time to prepare for potential policy changes—particularly as it pertains to pricing—prior to renewal. Going forward, policyholders may want to have quarterly meetings with their insurance professionals to ensure they are able to adjust their coverage as needed in this evolving inflation landscape.
- Review coverage terms and conditions. When meeting with their trusted insurance professionals, policyholders should also make sure to obtain assistance in reviewing their coverage terms and conditions, paying attention to any exclusions. Further, it’s crucial that insureds assess their policy limits (and sub-limits, if applicable) to determine whether they will be adequately covered following a loss. If policyholders or insurance professionals identify underinsurance issues, they may want to update their coverage and consider purchasing policy endorsements to maintain proper protection.
- Reassess property valuations. Regarding commercial property insurance, policyholders should be sure that their coverage reflects correct property valuations. With property repair and rebuilding costs on the rise, insureds must confirm the valuations utilized in their policies would be able to cover current recovery expenses after a loss. Otherwise, outdated valuations could leave policyholders underinsured if the cost of repairing or rebuilding their properties exceed their existing coverage limits.
- Ensure adequate risk management practices. Lastly, policyholders should make sure they have effective risk management measures in place to prevent potential claims. By documenting these measures and sharing them with their insurers, policyholders may even qualify for premium discounts.
For more coverage guidance, contact us today.