If you own apartment complexes or rent out condominiums or townhomes in Texas, Strata’s inability to renew on 3/15 will directly affect you.
In a letter issued to producers on March 15, 2022, Kerry Besnia, president of Strata’s underwriting managers, announced that “due to extreme conditions in the property CAT reinsurance markets, we were unable to secure adequate support to continue our program in its current form.” While they’re hoping to introduce a new product offering in the next few weeks, this could hypothetically take months or longer.
Barnard Donegan Insurance is available for any questions you may have and to recommend actions to take should you hold a policy that expires in the 3/15/22 – 4/15/22 timeframe.
If your coverage is expiring between 3/15/22 – 4/15/22, Strata is offering limited coverage and short-term extensions, waving any prorated penalties for cancellation, per Besnia’s letter. However, after 4/15/22, Strata is not offering renewals of their existing program. The exact terms and conditions and premium rates for the limited extensions have yet to be clarified.
Because of these unknown variables, if your habitational policy is due to renew after 3/15/22, we at BDI recommend speaking with your insurance advisor as soon as possible.
This is the busiest time of year for writing coverage in the property market, and underwriters will be inundated with writing new policies for habitational clients. Turnaround time for policy terms could take 1 to 2 weeks.
Market capacity is limited. Every company that writes insurance has a maximum amount of liability that they agree to assume from its underwriting activities. Once it reaches maximum capacity, they will no longer write insurance in that industry. This translates to fewer options for you, potentially higher premiums, and potentially less coverage. The sooner you can switch your coverage, the better.
If you have any questions or are ready to review your policy, don’t hesitate to contact your agent or BDI insurance at (830) 303-8300.