Finding appropriate coverage for high value homes can be difficult, especially when a home’s value exceeds the underwriting guidelines or capacity in a given market.
In cases involving a high-profile home, incomplete underwriting information or a negatively perceived property, placing such a risk can be even harder.
But difficult does not mean impossible, as Burns & Wilcox Los Angeles Branch Manager Tim Burnett and Senior Personal Lines Underwriter Chris Daniels demonstrated when they found coverage for a home that had not just one but all the aforementioned challenges — and then some.
In this case, the dwelling’s total insured value approached $100 million, which severely limited the number of potential carriers. It didn’t help that the property is known the world over and that the news media had inaccurately reported its ownership. Carrier inspection reports also contained inaccurate values and protection information. What’s more, the house is one of many owned by this wealthy foreigner, which created questions about its occupancy.
The Burns & Wilcox team pushed hard, working closely with its retail partner to thoroughly understand the risk and to find a carrier able to appreciate the pristine yet challenging opportunity. “When you are dealing with the exceptional homes, property and collections of the international super-rich, not to mention jet-setting owners who are hard to locate and whose representatives may be inaccessible, you need to challenge the carrier to think out of the box and appreciate the challenges and potential of the deal,” explains Burnett.
“It’s especially helpful,” he adds, “when you can marry the expertise and underwriting discipline of our team with the brokerage acumen we’ve acquired from many years of handling difficult placements.”
Burnett’s team proved the value of persistence and due diligence, thoroughly exploring the marketplace in the U.S. and in London, with support from the Special Risk Division within Burns & Wilcox Brokerage, to ascertain interest and — most often — to counter underwriters’ objections. For example, when one market indicated concern about the requirement for earthquake coverage, Burnett was able to assure them that the homeowner did not want earthquake coverage. The team dug deep to obtain and share with underwriters documents that proved ownership, and to dispel printed rumors about the house’s notoriety.
When one carrier’s underwriter passed on the risk, the broker team continued to press the case with executives at that carrier, fully aware that if they could get to the right person with the right answers, they could broker the deal. They involved the carrier’s West Coast manager and convinced the carrier’s group president of the risk’s potential. The team knew the clock was ticking, but also that the carrier had to be comfortable with the risk and acquire the necessary reinsurance.
“Once we could begin in earnest, it took about a week to navigate through the options and two days to arrange final terms with the carrier,” recounts Burnett. “With a deep client relationship and a highly qualified opportunity, we received the order within 24 hours of presenting it. A win all around and a big save for our retailer.”