How to Make Your NYC Property More Insurable

Two side-by-side buildings, seemingly identical, can have widely varying insurance premiums for many reasons. One major factor, which owners control, is how the building looks to an insurer. Taking care of your property, especially when it comes to timely maintenance, can save significant money when shopping for a new policy or negotiating a renewal.

While the fundamental characteristics of the property (e.g., construction type, number of units) won’t change, maintenance and upgrades can make a building more attractive to an insurance company. And that means savings.

The Correlation Between Lower Insurance Premiums and a Strong Building Profile

One way to qualify for lower insurance premiums is to work with your insurance partner and create a building profile. The goal of this document is to demonstrate that the building presents a low risk for the insurance company. The building profile will include such information as the following:

• Construction type
• Number of units
• Claims history
• Safety measures
• Occupancies

An experienced insurance professional, especially one who specializes in real estate, will help you assess the property from the insurance company’s perspective. He or she can also provide guidance on ways to present the property in the most favorable light. An attractive risk profile translates into more attractive premiums.

Improve Your Building Maintenance

Insurance companies want to know that an owner takes care of the property. Not only does maintenance protect your investment, but it also keeps tenants happy. The following measures can help improve your building profile:

• Look for signs of water damage on a regular basis. Repair any leaks and take measures to prevent mold proliferation.
• Keep sidewalks and steps free of major cracks.
• Repair the building façade.
• Keep the landscaping trimmed and tidy.
• Inspect and maintain handrails and fire escapes.

In addition, follow any regulations for elevators and laundry rooms, if applicable. And practice good maintenance: keep hallways clear, no wet floors, etc.

Perform Regular Checks and Repairs

Don’t wait until a problem occurs to perform repairs or maintenance. Check all major systems, such as HVAC and hot water, regularly. Test doors, handrails and anything that moves to make sure that it operates correctly. Look for missing or curling roof or floor tiles: ignoring a few damaged roof tiles now could mean expensive water damage later.

It can be helpful to ask someone who isn’t familiar with your building to walk through it with fresh eyes. Ask a trusted friend or relative to examine every part of the building as if they were a potential buyer. Does it seem well-kept to them? Does it communicate that the owner cares? It only takes one or two missing lightbulbs in the front hallway to send the wrong message.

Stay Clean and Compliant

Cleanliness is the fastest, easiest way to create a strong first impression, especially for an insurance inspector. Keep in mind that insurers are judging whether they want to insure your property and, if so, what premiums to charge. A property that immediately comes across as clean, well-maintained and compliant with local regulations is much more attractive than one that isn’t.

Upgrades that Boost Your Building Profile

Upgrades to major systems—like heating, electric and plumbing—greatly improve your building profile. After all, properties with newer, code-compliant systems have less risk of claims from, say, water leaks or electrical fires.

Keep track of all repairs and upgrades during the year and discuss them with your broker. In fact, a knowledgeable broker can help you plan upgrades to help you position your property favorably with insurance underwriters. Together, you can improve your building profile to qualify for the best pricing and policy terms.

Plan for Major System Overhauls

Even if major systems aren’t quite at the end of their lives, it may make sense to consider overhauls or replacements before they fail.

First, in some cases, a new system may be significantly more energy efficient, resulting in savings on utility costs every month. Second, government programs such as the Commercial Property Assessed Clean Energy (C-PACE) and Multifamily Buildings Low-Carbon Pathways programs are available to help pay for certain upgrades.

This is where an insurance agent, broker or advisor with extensive knowledge of the area and insurers can be invaluable. A skilled insurance partner can help pinpoint which overhauls and replacements will offer the highest ROI and be most attractive to insurers.

Add Security and Safety Features

Safety-related improvements make your building profile more attractive, such as better lighting and the addition of a doorman.

Consider going beyond the local building code and installing additional security features. Insurers will look favorably upon additions such as hard-wired smoke detectors or door cameras.

Collaborate with a Knowledgeable Broker for Better Insurance Terms

Commercial insurance is complex, and insurers frequently change the standards they use to evaluate buildings. A broker who works with multiple insurance companies can identify which companies will provide the best coverage at the best price, as well as help make your building more attractive to insurers.

A broker can highlight changes—sometimes relatively minor ones—that can result in more favorable rates.

Do you have questions about your building profile or building insurance policy? Call our office at 877-576-5200.