Navigating Property & Casualty Insurance

Preserving and growing your investments goes hand in hand with protecting your tangible assets when it comes to achieving your long-term financial goals. Just as we continually review investments to ensure that we are implementing our best ideas from a quality and valuation standpoint, the same rigor applies to tangible assets. Personal property and casualty (P&C) insurance for tangible assets is no longer a “set it and forget it” commodity given today’s evolving risk landscape. Whether you are insuring a home, car, or valuable personal belongings, your insurance program should be reviewed regularly to ensure it still aligns with your needs and risk exposures.

Insurance carriers are under increasing pressure to maintain profitability in the face of mounting claims losses, which has led to significant shifts in underwriting and pricing strategies. Rising costs from natural catastrophes, inflation in repair and replacement expenses, and an uptick in litigation have forced many insurers to re-evaluate the types of risks they are willing to take on. As a result, policyholders may see higher premiums, reduced coverage options, stricter eligibility criteria, or increased deductibles (even if they have not filed a claim). These changes can vary widely by region and property type, making it crucial for individuals to stay informed and understand how these evolving strategies could impact their current policies and future insurability.

Traditional insurance policies often fall short of providing the nuanced coverage required to safeguard luxury homes, valuable collections, and other significant assets. Here are some factors to be mindful of:

• Policy Renewal: One of the most overlooked aspects of a personal insurance program is the renewal process, specifically, how the contract language can change from year to year. Many policyholders assume that renewing a policy means the terms and coverage remain the same, but insurers often revise policy language to reflect new exclusions, updated definitions, or changes in how coverage applies. These modifications might be buried in fine print or addendums and can have significant impact on claim resolution. For example, a once-covered water damage scenario may now fall under a new exclusion, or sublimits (specific caps on coverage) may be introduced for certain types of personal property. Reviewing these changes carefully each renewal cycle is essential to avoid surprises when a claim arises.

  Scenario: While chatting with a client, a relationship manager inquired about the renovation of her Boston condominium. The client explained that she may need additional funds because there was a leak in the roof, and it was worse than anticipated. The client went on to reveal that the association’s coverage was subject to a $25,000 per-unit deductible and her personal coverage would not respond to cover the association’s deductible. The relationship manager introduced the client to our P&C insurance advisor, who understood how the two policies work and pointed out that her personal condo policy did have the applicable coverage. Ultimately, the client was able to report the loss to her personal insurer, and she received a claim settlement. Our P&C expertise can help you understand and maximize your coverage.

• Standard Coverage Limits: Even with a policy in place, many individuals are surprised to discover that their coverage does not fully protect them when it matters most. Standard policies often come with limitations or exclusions that can leave significant gaps in protection. For instance, items like jewelry, fine art, or collectibles may have sublimits far below their actual value, while common risks such as sewer backups, mold damage, or ordinance or law requirements might not be covered at all without endorsements. Additionally, inflation and rising building costs can result in underinsurance if coverage limits are not reviewed and updated regularly. A thorough policy review ensures your coverage keeps pace with your assets and evolving exposures, helping to prevent costly shortfalls in the event of a loss.

  Scenario #1: Our P&C Insurance advisor met with a client to review their existing coverage for potential deficiencies. After a thorough discussion around their circumstances and property, including details on the construction, high-end finishes and custom features, our advisor researched building costs for their location (through interviews with industry experts) and determined that their current dwelling limit left them substantially underinsured by approximately $1.5 million. Additionally, our advisor explained why the standard insurance carrier’s assessment of the property’s reconstruction value is typically lower than what is appropriate for higher-end construction. Ultimately, we secured several offers with appropriate coverage limits from alternative carriers whose contracts were more suitable for the quality of construction and materials. Our P&C expertise ensures that your material goods are safeguarded and provides peace of mind.

  Scenario #2: Our P&C Insurance advisor met with a client to review her existing coverage for potential strategy recommendations. After a thorough conversation regarding her current circumstances and possessions, the client realized that the policy included sublimits and exclusions for common types of losses to valuable articles. She understood that she could not rely on her personal property coverage for a few pieces of jewelry with significant value, and our advisor worked with her to secure separate jewelry coverage.

• Carrier Capacity: Another growing concern in the personal insurance market is carrier capacity, the amount of risk an insurer is willing or able to take on in each region or line of business. As losses mount in high-risk areas such as wildfire-prone regions and coastal zones, or areas experience severe weather volatility, insurers are reducing their exposure or pulling out of these markets altogether. This contraction in capacity can lead to fewer options, higher premiums, or the need to piece together coverage from multiple carriers. It also increases the importance of working with knowledgeable insurance professionals who understand the market landscape and can help identify viable alternatives. Understanding your carrier’s capacity limitations can provide critical insight into the stability and longevity of your coverage.

• Non-Admitted Carriers: As the standard insurance market continues to remain tight, more individuals are finding themselves insured through non-admitted carriers, insurers not licensed in the state where the policy is issued. While non-admitted carriers offer solutions when coverage is unavailable in the admitted market, they come with important distinctions. These carriers are not subject to the same rate and form regulations and typically do not participate in state guaranty funds, meaning less consumer protection if the carrier becomes insolvent. Additionally, policy language may be more customized on a per-risk basis, requiring a closer review to fully understand what is and is not covered. When working with non-admitted insurers, it is especially important to rely on experienced brokers and to vet the carrier’s financial strength and claim handling reputation.

• Discontinued Coverage: Policyholders across the country are increasingly facing non-renewals and cancellations, even if they have no claim history and have been with the same carrier for years. These decisions are often driven by factors beyond an individual’s control, such as a carrier exiting a geographic area, changes in risk modeling, or portfolio rebalancing to maintain profitability. In some cases, a property may be deemed uninsurable simply due to its location, age, or construction type. Receiving a non-renewal notice can be stressful and disruptive, particularly if alternative coverage options are limited. It is imperative to stay ahead of potential issues by maintaining a proactive relationship with your agent, understanding your risk profile, and having contingency plans in place well before renewal time.