Posted on 03 Nov 09
Since we featured RISC as one of our newest Storefronts in June, the company has added a brand-new Vacant Program to its product offerings, to address the growing risk and exposures that come with vacant properties. We spoke with Chris Hayes, Senior Vice President of RISC, about the program. Based in Dallas, Texas, RISC is a managing general agency and surplus lines broker licensed in 50 states, with more than 50 employees and over $100 million in premium.
Let’s take a quick look at vacancy stats: There is an estimated 18.7 million homes that are vacant in the country, which represents about 14 percent of the housing market. Commercial real estate vacancy rates are pegged to be even worse as this sector typically follows the residential market by 18 months. Office vacancies rose to a five-year high in the third quarter of 2009, according to property research firm Reis Inc. And vacancies climbed to 16.5 percent from 13.7 percent in the year since Lehman Brothers Holdings Inc. filed for bankruptcy. [Bloomberg]
“This growing problem is not going away, and we have a solution to meet the challenges inherent with vacancies,” says Chris. “AU Gold, underwritten at Lloyd’s, has developed a program to meet the increasing need to insure more and more vacant properties. AU Gold entered this sector four years ago and have a solid track record in providing agents and brokers with access to an on-line quoting tool that allows them to get pricing for vacant properties in minutes.” According to Chris, this is key, as most insureds don’t realize that their standard Commercial Property or Homeowners policy don’t cover vacant properties. Once a foreclosure occurs, the insured is scrambling to get coverage. “What typically happens is that the agent or broker will get a call saying, ‘Do I have coverage? I need coverage now!’ There isn’t much time to wait for quoting and binding. With the RISC Vacant Program, the broker can easily go on-line and within minutes get a number of quote options. We then bind and issue the policies straightaway.”
The on-line quote browser-based system is easy to use and cuts down the number of questions on the application to two pages. To use the system, all you have to do is call Chris at RISC to provide you with a password.
The program is available nationally, except for Kentucky, and is written on a non-admitted basis on Lloyd’s paper (AM Best Rating “A” Excellent). Residential coverage is the basic DP1 and DP3 form, with building limits up to $3 million and Liability up to $1 million. Commercial coverage is based on the basic and special forms, depending on the age of the building, with property limits also available up to $3 million. Liability limits for Commercial are $1 million occurrence/$2 million aggregate. Policy terms include 3, 6, 9 or12 months, and there are deductible options available as well.
“The ease of delivery is what makes this so unique. It is designed to come into the retailer’s universe and help him/her address the needs of customers who are looking at insuring their vacant properties now.”
Chris explains that 40 percent of what is quoted has been bound on this program. “This is a very high ratio.”
RISC through AU Gold is also offering the program for properties that have partially vacant buildings. “If there is a strip mall, for example, and there are some units that are vacant, coverage is available through our program for those properties. This opens up the market for agents and brokers.”
To find out more about the RISC Vacant Program, please call Chris at 214.220.0859 (office) or 972.757.4080 (cell). You can also email him at: firstname.lastname@example.org. Highlights of the program are available at: http://www.gorisc.com/vacantbldg.html.