It is just what you need!
Just what you need, ANOTHER cost of doing business! Haven't you spent enough on your operations? Now someone puts the idea of an inspection program out in front of you. How much effort will this take? What is the cost? Why bother? All valid questions.
Well, an effective inspection program could be very necessary. Actually, it IS very necessary whether you think so or not. After all, who REALLY knows their property business that intimately? It could be that the book is rather aged. Or, a portion of the book may have been inherited or purchased and is simply an unknown to you. Perhaps the properties simply haven't been reviewed within the past 3-5 years. What hazards, what conditions are out there that may be a bit “scary” to uncover? What about insurance-to-value? Is the book adequately priced? After all, exactly what are you insuring?
Who is best suited to inspect?
Whether you do it yourself or have another resource provide it, consider:
An experienced resource that can review the risk as an unbiased 3rd party and as a strong underwriting resource to you. While you may not be able to be there, this person is there to uncover what you need to know on the property as your "eyes and ears" in the field and should provide you with photos and documentation that clearly disclose the property in “as is condition”.
A resource that is knowledgeable, professional, and dedicated to meet your needs. The last thing you need is an agitated insured due to unprofessionalism on the part of an inspector. You need the experience and ability of a resource to provide you with high quality property insurance inspections. Ideally, a resource that has the necessary insurance background to identify underwriting hazards.
A resource that can provide thorough, consistent, easy-to-read reports with extensive descriptions of the property. A report that provides a type of hazard scoring mechanism that can grade out a property according to levels of hazard and that fit your underwriting appetite.
The use of management reports to cumulate all the data obtained in the inspections and allow you to detect trends and opportunities for improvement. This can be a manual process of inputting all inspection data fields in to an Excel document. Or, by using a management system that provides that data to you.
The cost to you. If you do it with internal staff, the fixed costs of a salaried employee. If outsourced, you have scalable options rather than a fixed underwriting cost and allows you to better manage unusual patterns of premium and geographic growth.
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Any viable inspection program should provide:
Improved Understanding of Risk Knowledge
By receiving detailed condition and hazard survey information, you're able to better control losses – both the severity of those occasional large losses and the frequency of the more common small losses.
It’s estimated that over 60% of homes are underinsured on average from 18% - 27% with some reaching as much as 50% - 60% of underinsurance. A thorough inspection with insurance-to-value solution based upon accurate measurements recorded on site yields a more accurate premium to exposure.
It's a Profit Center
And now, here’s the best part. Did you know that you can actually make money off of the program? That's right, a growth investment. Two parts to consider here: an increase in premium and a reduction in losses. Pick one or the other or pick them both.
By taking an even moderate amount of Coverage A increase (due to better insurance-to-value on the properties), you can realize at least a wash on any cost outlay of the inspections. It's quite likely that the increase in premium will be greater than the upfront payout on the cost of the inspections. Combine the premium increase with a just a moderate assumption of loss avoidance/mitigation (both large and small losses), and the return-on-investment only climbs higher. Increase your premium, decrease your losses, reduce your loss and combined operating ratio. Contact Us to receive an Excel Document that shows you how.