Vacant Building Insurance: Why Underwriting Flexibility Is Important for Brokers and Insureds

In providing insurance for vacant buildings, there are clear underwriting guidelines to help ensure the client’s risk profile is good. But you also want flexibility in order to be able to meet an insured’s needs and expand your footprint.

That’s where Distinguished Programs and our Vacant Building program come in. We don’t just stop where the guidelines end. We look at each risk, evaluate it further, and see how we can work together with our broker partners to write the account.

What’s Considered a Vacant Building?

A vacant building is one that is finished but unoccupied. It can be new construction that is waiting to be leased, occupied, or sold. It can be a preexisting building that’s empty and in between tenants. It can also be a single-family home that’s up for sale, with the owners already taking up residency in their new house.

A Look Inside Our Vacant Building Program

Our Vacant Building Insurance Program covers the gamut of properties – from single-family to multi-family dwellings (apartments), commercial offices, retail stores, and mixed-use buildings. We offer both Property and General Liability (GL) coverage. We can write limits of up to $1 million/$2 million on the GL side. Our footprint is national, with the exception of coastal properties.

We Insure All Types of Construction

We write all construction types – from frame to fire-resistant buildings. Our program also offers policy term flexibility – you can provide 3, 6, 9, or 12 months of coverage for your insureds.

If the property is vacant for more than 12 months, while this doesn’t fit within our appetite, we are open to discussing the risk and its vacancy. If the building is in good condition and there are no financial concerns, we could consider extending the term of the policy.

Our Total Insurable Value (TIV) on a vacant building is $5 million. However, again, there is flexibility within our guidelines if the risk is a good one, and it makes sense to provide higher limits. For example, we recently had an opportunity to quote a three-month policy for a new office building. The TIV was $6 million. After discussions with the broker and further evaluation of the risk, we were able to bind coverage with the carrier for the TIV requested.

Data Helps Us Determine Property Values

Actual Cash Value and Replacement Cost coverage options are available with our Property form. We look at U.S. Census data and work with Marshall & Swift/Boeckh (MSB), a residential and commercial property valuation solution provider. MSB updates property values on a regular basis and takes into account the current economic landscape (inflation, the cost of materials and labor) when determining values. This helps us to stay abreast of market conditions and work with our brokers to insure the property properly.

If a bank requires a certain insured value on a property, we will work with our broker to see if we can get to that value, asking for additional documentation, including an appraisal. We understand that certain properties, such as high-value homes, have unique features that elevate the property’s value.

In fact, our program is ideally suited for high-value homes. When unoccupied and on the market, many of these homes are staged and require insurance. We can provide a sublimit to cover the personal contents.

Our Portal Makes It Easy for Brokers to Quote and Bind Coverage

The majority (65%-70%) of our Vacant Building accounts are written through our online portal. Brokers simply go online to complete an application, get a quote, and bind coverage. It’s easy and painless. Just register or log in to the portal.

About Distinguished Programs

Distinguished Programs is a leading national insurance Program Manager providing specialized insurance programs to brokers and agents with specific expertise in Real Estate, Community Associations, Hotels, and Restaurants. Property and liability products are distributed through a national network of agents and brokers. Serving the same core markets and partnering with the most stable and reputable carriers, Distinguished Programs’ high-limit umbrella programs remain the clear choice in its areas of specialty for superior coverage, competitive pricing, and attentive service. Through thoughtful innovation, stemming back to 1995, Distinguished Programs fosters growth and opportunities for its brokers, carriers, and employees.

View a full list of our programs and submit business with Distinguished.

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