Optimizing Your Real Estate Insurance Coverage with LineSlip

Risk executives managing property risks for their companies have a lot on their plates right now. 

In recent years, they’ve had to face claims from weather events, like wildfires and hurricanes, with increasing frequency. Some might have thought their properties were in areas where they weren’t exposed to these types of catastrophes, only to be hit with a loss.  

Added to these challenges is sky-high inflation, which has driven up the costs of rebuilding after a loss. Replacement costs are sometimes close to 40% higher today than four years ago, a spokesperson for the Insurance Information Institute told Bisnow.  

In light of these problems, risk teams need to take action to manage their commercial property risks. Reconsidering exposures, evaluating their insurance portfolios, and checking to ensure they have the proper amount of coverage is critical to ensuring all properties are properly protected. The right tools can help risk teams organize their insurance policy data and exposures so they can feel confident that they’re adequately protected.  

Combining Historical Data With Real-Time Insights 

One of the first things risk managers need to do when evaluating their real estate portfolios is to consider their exposure to various weather risks. Understanding what perils their properties are exposed to is critical to getting the right insurance coverage.  

When it comes to managing property coverage, risk managers and executives have long relied on historical weather patterns to help them understand what perils they’re exposed to and need to purchase insurance coverage to protect against. But with weather patterns evolving and natural disasters increasing, historical data alone may not be sufficient for evaluating exposures. 

Take flood risk, for instance. Fifty-eight percent of FEMA’s floodplain maps are inaccurate. Some newer risk models have found that twice as many properties are at risk of 100-year floods than the government models indicate. Yet, many rely on these outdated tools to determine whether or not they should purchase commercial flood insurance.  

Risk managers and executives need to consider what kinds of climate perils their properties have faced in the past and which ones they might face in the future as a result of shifting weather patterns. For instance, LineSlip’s Real Estate offering uses peril maps compiled from virtually real-time natural catastrophe data with analysis of historical patterns.    

Ensuring You Have the Right Amount of Coverage with LineSlip’s True Replacement Cost 

Once an insured understands what exposures they need to purchase coverage for, they need to reevaluate whether or not they have the right amount of insurance to rebuild after a loss. With inflation driving up the cost of rebuilding, many risk managers and executives might find their coverage coming up short if a claim occurs.  

As with climate perils, risk managers and executives have relied on a limited data set to adjust their replacement costs. For much of the last 40 years, inflation has only increased by 6% or less. In some years, the rate went up less than a percent. As a result, risk teams could safely adjust their replacement cost estimates by 3-4% each year and feel confident that they have enough insurance coverage should a claim occur. 

However, this has not been the case since 2020. Supply chain delays—due to the pandemic and other geopolitical forces— pushed the cost of building supplies way up. In 2021, the rate of inflation for construction supplies reached 19.6%, the Construction Financial Management Association found. Now, risk managers and executives need to consult real-time data from both claims and contractors to ensure that they have adequate coverage. 

LineSlip’s True Replacement Cost feature compiles this data so that risk managers and executives can accurately estimate their property values and purchase the appropriate amount of insurance coverage. LineSlip uses the same data sources as many insurance carriers so risk teams can come to the negotiating table with the same information as their underwriters. 

Manage Portfolio Changes 

Making sure you have the right amount of insurance coverage isn’t just about inflation. Risk managers and executives with large portfolios are constantly acquiring new and divesting from properties. They might invest in a new project, build a new building, or sell an old one. They also might be managing shifting occupancy rates for their office and retail buildings. All of these changes could have implications for their insurance policies. If a business divests from a property, it could be entitled to prorated premiums.   

These portfolio changes are on top of the valuations and exposure assessments they need to conduct to ensure they have the appropriate amount of coverage. LineSlip’s Real Estate dashboard allows insureds to visualize all the properties in their portfolio — whether newly acquired or recently divested. The feature ensures that risk managers and executives remain on top of their insurance programs. 

All of Your Data, One Convenient Location

With commercial properties facing a myriad of challenges, risk managers and executives need to make sure they’re taking steps to tackle exposures on all fronts. LineSlip’s Real Estate and True Replacement Cost offerings make managing and mitigating these exposures easier. 

From evaluating natural catastrophe risk to managing insurance for a large number of properties, the Real Estate offering provides risk teams with a centralized view into the insurance programs for their commercial real estate holdings.  

The tool combines insurance data — including policy retentions, limits, and premium expenditures — with occupancy information, portfolio changes like acquisitions or divestitures, and other property data. That way, risk managers and executives have up-to-date information about every aspect of their insurance program at their fingertips.  

Additionally, LineSlip’s Real Estate offering includes a peril map overlay that allows risk managers to see what types of natural catastrophes affect their geographic region. The tool offers both historical and near real-time data insights for fires, floods, windstorms, and earthquakes. In the event a natural catastrophe occurs, risk managers and executives receive updates on the threat, pulled from National Weather Service data so that they can mitigate losses before they occur.  

This summer, LineSlip added the True Replacement Cost feature to its real estate offering. True Replacement Cost analyzes regional construction, claims, and materials cost data to comprehensively evaluate how much it will take to rebuild a property in the event of a loss. With inflation pushing up the cost of building supplies, this tool plays a critical role in ensuring that commercial property owners have enough insurance coverage to rebuild if a claim occurs.  

When combined, Lineslip’s Real Estate and True Replacement Cost offerings give risk managers and executives the tools they need to successfully navigate this complex environment.