The Challenge: Reduce Property Risk in a Tight Market
Many real estate investors are finding it’s a tough time to protect their properties with sufficient insurance coverage that reduces their financial risk. With major insurance carriers pulling out of some markets, it can be difficult to find coverage in some cases. And even when coverage is available, the rate increases are often astronomical at renewal time.
That’s exactly what real estate investor Brad Rozansky of The Rozansky Group discovered when he expanded his personal property portfolio with the purchase of a secondary home in Palm Beach Gardens, Florida.
Though he was able to secure coverage through a local Florida agent when he bought the home in 2020, at renewal time the premium was set to rise significantly, and the coverage wasn’t entirely adequate. On the recommendation of his wealth manager at Chevy Chase Trust, part of the B. F. Saul family of companies, he contacted B. F. Saul Insurance.
Across the client’s portfolio of seven personal properties—a primary home, multiple secondary homes, and several rentals, spread across three markets—the B. F. Saul team believed they could help him secure better coverage and value, protecting his financial interests more effectively.
Task #1: Fill Essential Gaps in Protection
Erika Marino, a Vice President and Personal Lines Producer at B. F. Saul Insurance, learned that Rozansky was insuring his personal properties through a carrier that caters to the middle market—not individuals with high net worth and significant physical assets. After a thorough review of his existing policies, she found many of his properties weren’t covered sufficiently for the risks he was exposed to.
For example:
- Most of the homes didn’t have guaranteed replacement cost coverage, which covers the cost to replace the home in the event of a total loss at today’s construction prices. As a result, the client was underinsured and at risk of paying significant out-of-pocket costs. One property, a coastal condo valued at $2 million, was only insured for $600,000.
- Most properties had very low limits for water damage and no water backup coverage, even though water is a significant exposure for secondary and rental homes.
- Due to constraints on the excess liability policy limits available from a middle market insurer, Rozansky was greatly underinsured from a liability perspective, especially given the size of his real estate portfolio.
Based on these gaps, Marino recommended that Rozansky move his personal property insurance policies to a carrier more suited to insuring high-end properties owned by clients with significant assets.
“Because of the combination of exposures, it wasn’t easy to find one home to move all his properties to,” Marino said. But through its diligent work, the B. F. Saul team was able to wrap all his personal properties into a single package, providing better protection and the peace of mind that comes with it.
Task #2: Work Through a Challenging Renewal
Fast forward to the summer of 2023, and Rozansky faced a new dilemma: At a time when major carriers are pulling out of high-risk markets, in part due to catastrophic weather claims, the current insurer wasn’t going to renew the policy on two of his properties: an Ocean City condo and an older rental in Bethesda, Maryland. The premiums on the remaining homes were going to increase dramatically—as much as 30%—and the insurer had set new requirements for keeping the coverage in force.
The B. F. Saul team of Marino and Account Executive Lori Callahan got to work with plenty of lead time (about 90 days before renewal), negotiating aggressively with the insurance carrier to achieve a better outcome.
The Results: Better Coverage, with No Big Renewal Hikes
Through their in-depth knowledge of the market, continued diligence, and commitment to providing Rozansky with the best available solution, Marino and Callahan were able to achieve a very strong result for the renewal:
- The carrier did an about-face on the Ocean City property and agreed to renew it, with no increase in premium.
- By increasing his deductible and making minor coverage changes, the client obtained a renewal on the Palm Beach policy at a similar premium as the previous year.
- The insurer agreed to a much lower premium increase on two of the rental properties, resulting in just a modest year-over-year rise.
- The team negotiated a better premium on the client’s primary home by disputing the new property value the carrier was basing the rate on. “We got them to come down on the inflation factor they applied to the home’s value,” Marino explained.
- B. F. Saul Insurance found another option for one policy the insurer wasn’t willing to renew (an older rental that needed major renovations), while Rozansky moved an auto policy on a vehicle that he keeps at the Florida home.
“We finally got the terms worked out and it was a huge win,” Marino said. She was in nearly daily contact with Rozansky throughout the three-month process, and he was appreciative of the attentiveness and service.
“Since the beginning I’ve found Erika and Lori to be professional, knowledgeable, and trustworthy,” Rozansky said. “They always respond fast, and they did whatever they could to make sure I kept my insurance.”
While the renewal proved an especially critical time, B. F. Saul’s commitment to exceptional service extends far beyond policy renewal periods.
“Brad’s exposures are always changing because he’s an active real estate investor who buys and sells properties frequently,” she explained. “So I stay in constant contact with him.” For example, he’s preparing to build a new property in Rehoboth Beach, Delaware, and B. F. Saul will be arranging the builder’s risk coverage.
Rozansky also appreciates the ability to get objective advice from the B. F. Saul team, even on properties they don’t handle the insurance for.
“They’re giving me good advice on a water damage claim I’m currently involved with on one of my commercial properties, even though I don’t have those policies through B. F. Saul,” he said. And when he recently purchased another commercial property in Washington state, he sought his independent insurance advisor’s input on how to best insure it against earthquake risk.
Next Steps: Expanding the Relationship
Based on a poor experience with his commercial property insurer on the recent water claim, Rozansky is now looking for a better home for his commercial portfolio. And based on his outstanding experience with B. F. Saul Insurance, he’s asked the B. F. Saul team to evaluate his commercial property coverage needs and assess whether they can do exactly what they did on the personal property side: secure better coverage at a better value.
It’s a significant undertaking, since he typically owns 8-10 commercial properties at any given time, ranging from a warehouse and a flex industrial building to a bar, daycare, and paint store. But Rozansky is confident in B. F. Saul’s capabilities.
“It’s all about the team behind you and the advice they offer,” he said. “It’s a good group that really cares, and they give you tremendous service and confidence. That’s what you want from any professional you’re dealing with.”
As Vice President, Personal Lines, Erika Marino leads business development efforts for B. F. Saul Insurance’s private client group and oversees the management of client relationships and sourcing of new accounts. She started her career in wealth management, working for Morgan Stanley as a financial advisor before she made the switch to insurance in 2018 when she joined B. F. Saul.