You cannot control the Florida insurance market. Every owner in the state has learned that at a renewal, usually in one sentence from a broker. What you can control is what your building looks like to the underwriter who prices it, and most owners have never looked from that chair.
This is the sixth article in a series on how to read your own building. The third article put insurance among the five operating lines that move. This one is about the four things on that line that are actually in your hands, and the order to do them in.
An underwriter is not pricing your building. They are pricing what they can verify about it. A commercial property submission is a short file: construction type, age, occupancy, the roof, the wind features, the insured value, the deductibles you chose, and the claims the building has made. The market sets the rate for a building it cannot see clearly. You set how clearly it can see yours.
The roof is the largest single question on a Florida commercial submission, and the answer most owners give is "I think it was done before we bought it." An undocumented roof gets priced as an old roof, and past a certain age many carriers decline it or price it as if it were failing.
The file that changes that is not complicated: the year the roof was installed or replaced, with the permit or the contractor's invoice; the material and the system; the last inspection and what it found; every repair since, with the invoice; a few dated photographs. Keep it in one folder and send it with every submission. An old roof with a file is a different risk from an old roof nobody has been on, and underwriters price the difference.
Florida's building code has required stronger roof connections and protected openings on new construction for decades, and many older buildings have had some of it added since. None of it counts for insurance unless an inspection documents it.
A wind-mitigation inspection is a report by a licensed inspector or engineer recording the features an underwriter credits: roof-deck fastening, roof-to-wall ties, roof shape, opening protection, and a secondary water barrier under the covering. For a house, Florida requires insurers to discount for those features. For a commercial building the discount is not mandated, but the pricing works the same way: verified features get credit, unverified ones get nothing.
The report costs a few hundred dollars. On a building of any size it does more for the premium than almost anything else in the maintenance budget.
A Florida commercial property policy usually carries two deductibles: a flat one for most losses, and a separate hurricane or named-storm deductible expressed as a percentage of the insured value, commonly between 2 and 5 percent. Most owners carry the structure they were handed at closing and have never priced the alternatives.
The percentage is the number to understand, because it is a percentage of the building's value, not of the loss. A higher named-storm deductible cuts the premium and can be the right choice, but only if the reserve exists to fund it the week after a storm. That is a capital-reserve decision as much as an insurance one.
The policy insures the building for a stated amount. If nobody has updated it since the purchase, it is wrong, because construction costs in Florida have not stood still. Too high, and you are paying premium on value you could never collect. Too low, and you are carrying a gap you will discover on the worst day, and a coinsurance clause makes the gap larger than it looks.
Coinsurance is the part of the policy most owners have never read. It requires the building to be insured for at least a stated share of its replacement cost, often 80, 90 or 100 percent. If it is insured for less, the insurer pays only the proportion you carried, on every claim, not just a total loss. The fix is a replacement-cost estimate, updated every few years and after any major work.
The figures are illustrative, not a building we manage.
A 30,000-square-foot retail building with a replacement cost of $6,000,000.
The premium difference between the two deductibles depends on the carrier and the year; ask for both quotes. The coinsurance shortfall is arithmetic, and it is there whether or not anyone asks.
All four have to be done before the renewal, not after. Start 120 days out. Pull the roof records and fill the gaps. Order the wind-mitigation inspection. Get the replacement-cost estimate. Ask your broker for the loss runs, the claims history the underwriter will see, and read them first. Decide the deductible with the reserve in front of you. If a large part of the building is empty, say so; the vacancy clause from the last article is handled with an endorsement, and it is cheaper to ask than to find out at a claim. Then send your broker a complete file and let them shop it. A complete file gets a different answer from the same market, because it is a different risk on paper, and paper is what the underwriter prices.
Find the renewal date, count back four months, and put the items above on that date. This year, do the roof file and the inspection even if nothing else. Next year, the valuation and the deductible. By the third renewal the building is presenting itself the way an underwriter wants to see it, and the premium will say so.
Gain Property Group manages office, retail, industrial and multifamily property across Hillsborough, Pinellas, Pasco, Polk, Manatee and Sarasota counties. We also own commercial buildings ourselves, in other markets, so we read these numbers the way an owner does.
If you own commercial property in Tampa Bay and want your building read the way an underwriter reads it, request a free management assessment. In writing, no obligation, whether or not you change managers.
This article is general information about commercial property operations and insurance for owners. It is not investment, legal, tax or insurance advice; your policy governs.