What's New? What's Necessary? Insurance Products

It’s capitalism’s most basic tenet: supply and demand. When supply is sparse and demand high, prices go up. When supply is plentiful however, prices go down—and suppliers are forced to diversify their offerings in order to distinguish themselves and remain competitive in a flooded marketplace.

That’s not unlike what’s going on in the insurance market at the moment. Not medical insurance, which we all know is climbing, but the insurance premiums on your co-op or condo building, which are either remaining steady or actually decreasing. This might seem surprising, since the current state of the economy and increased threat levels from both natural and manmade disasters would seem obvious reasons to increase insurance costs, but insurance experts agree that the market is soft and competition among firms have forced prices down and new products online.

Christine Chipurnoi, senior vice president of Real Estate and Construction Practice at Wells FargoInsurance Services in New York, recently wrote a new insurance policy for a New York City building. The board watched their annual premiums decrease by $17,000 and, at the same time, include more and better-rated coverage than before.

“When insurance companies are doing renewals, they want retention and want to make a similar amount of money that they made last year,” says Chipurnoi. “They finish their renewals at the end of the year, but if [the amount of] renewals are down they have to write new business in a very competitive way.” This competition can result in different coverage options and tremendous savings for buildings.

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Not only are rates going down, but the menu options for insurance coverage have also changed quite a bit over the last few decades. The standard package policies still exist—these include property insurance, boiler and machinery and general liability coverage. However, certain events have a tendency to add new insurance or change existing insurance coverage.


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