It is time once again to prepare for the July 1, 2021 Property Program and Pollution Program renewals. Details are provided in the box to the right of the upcoming workshops to assist you in reviewing and updating your agency’s property schedule, COPE data, and vacant building listings. Please read the following information thoroughly, as
It is time once again to prepare for the July 1, 2021 Property Program and Pollution Program renewals. Details are provided in the box to the right of the upcoming workshops to assist you in reviewing and updating your agency’s property schedule, COPE data, and vacant building listings.
Please read the following information thoroughly, as it includes detailed information on various aspects of the renewal process. The first step in the process is to update your agency’s property schedule. The deadline to complete this is January 28, 2021. Data in your agency’s property schedule as of this deadline will be used by the Authority in its negotiations with carriers for the July 1, 2021 renewal.
If your agency does not currently participate in the Property Program but may want to for 2021-22, please contact Jim Thyden, Insurance Programs Manager with the California JPIA at (562) 631-5449 or firstname.lastname@example.org.
Updating the schedule of values this year will be different than in past years because all members in the Property Program have had appraisals completed by our business partner, CBIZ. The appraisal data has been imported into the AlliantConnect database where members can review both property schedules and vehicles schedules. If you need an AlliantConnect profile or would like to schedule an individual/group training session on how to use the database, please contact Joe Sanders, Senior Business Analyst with Alliant Insurance at (949) 660-8153 or email@example.com.
You are invited to attend either of two online workshops to learn about the Property Program and the renewal, appraisals, pollution program, and vacant buildings. The first will take place on January 12, 2021 from 9:00 a.m. to 10:30 a.m. The second will take place on January 13, 2021 from 2:00 p.m. to 3:30 p.m. Further information about participation in the workshops is provided in the box to the right. If you are unable to attend either of these, and would like to review this information, please contact Jim Thyden, Insurance Programs Manager with the California JPIA at (562) 631-5449 or firstname.lastname@example.org.
Data and Document Review
Please review your agency’s:
Because Property Program annual contributions are dependent upon the value and type of property to be covered, as well as loss history, it is essential that every location and every vehicle for which your agency desires coverage is scheduled. With the data from the recent appraisals now in AlliantConnect, all the information contained in the data fields for each location on your property schedule should be reviewed this year for accuracy and completeness. Please note that for any fields left blank, assumptions will need to be made about the data, which can result in an increased rate charge for the applicable location.
The data fields are:
- Complete Address
- Construction Type (frame, block, masonry, reinforced masonry, etc.)
- Occupancy Type
- Protection Systems (fire and/or alarms, fencing, security services, etc.)
- Year Built
- Year Remodeled (if applicable)
- Square Footage
- Number of stories excluding basement
- Sprinklers (yes/no) or percentage of building sprinklered if not 100%. If sprinklers do not apply to a location, please select “N/A” in the percentage field.
- Earthquake/Flood coverage desired for location (yes/no)
- Valuations (on a Replacement Cost Basis) – Building, Contents, Tax Interruption, and Business (Revenue) Interruption
- For Vehicles: Year, Make, Model, Complete VIN# and Value
Pricing and COPE Data
Over the years, the Authority has implemented changes to the Program to make the rating process and allocation of program costs equitable among members. Rating is based upon each member’s exposures and loss history. As such, members should provide the most accurate data possible for each location, as a lack of critical information defaults to the least favorable treatment in the rating process. This data is called COPE data and is important because it is the fundamental data that is used to price and allocate annual contribution in the program. COPE stands for:
- Construction – what it is made of?
- Occupancy – what it is used for?
- Protection – how is it protected (fire alarms, etc.)?
- Exposure – proximity to natural or other hazards. Proximity to fire station.
As the property insurance market has hardened and losses have trending upward, the quality of the COPE data submitted to underwriters has become increasingly important. From an underwriting perspective, the goal is to properly assess a location’s risk and determine the level of exposure associated with that location. A key element to this risk assessment is evaluating “relative rating factors,” which is a method of applying credits or debits to each location based on the COPE information provided relative to all other locations in a particular portfolio. While every location can have a different impact on overall risk based on its construction, the lack of COPE data results in an assumption by underwriter models of the “worst-case” rating factor. What this means for your agency is that a maximum amount of debit will be applied to each location lacking sufficient COPE information.
It is also important to note, that the construction type of a building can have a drastically different impact based on the type of coverage that is being underwritten. For example, while a wood frame building may have a higher rating factor for “All-Risk” (e.g. fire) perils, the very same building would have a more favorable rating factor for earthquake coverage. This is because wood bends and sways during an earthquake but burns faster than concrete in a fire.
A lack of COPE data may result in a significantly adverse result to that location from a rating perspective. When this is compounded over multiple locations, the result can be a higher rating and cost for an individual member of the program.
Understanding COPE and what it means to the underwriting process will help your agency properly cover locations and gain a better level of control over your annual contribution by reducing any significant fluctuations from year to year.
Vacant or Unoccupied Buildings
There are significant differences in coverage available for buildings that are vacant or unoccupied versus those that are not.
For the purposes of coverage, a building is considered vacant or unoccupied when it does not contain adequate property to conduct customary operations. However, any time period when customary operations are suspended due to circumstances that are usual to such operations does not in and of itself render a building to be vacant or unoccupied.
The Memorandum of Coverage – Property Program differentiates coverage as follows:
- Unscheduled vacant buildings are excluded from coverage.
- Scheduled vacant buildings have a sublimit of $2,500,000.
- Scheduled vacant buildings have a deductible of $500,000.
- For claims to premises that are vacant for more than 60 days and reported to the Authority, actual cash value, not replacement cost, will apply.
- For claims to premises that are vacant for more than 60 days and not reported to the Authority, the maximum recovery by the member will be actual cash value, less 25%.
Please review all of your agency’s locations to ensure that any vacant buildings are properly noted and that any locations that are not vacant are listed on the property schedule with the correct occupancy. If you would like assistance determining whether a building is vacant or unoccupied, please contact Christopher Gray, Account Manager with Alliant Insurance at (949) 660-5944 or email@example.com, or Jim Thyden, Insurance Programs Manager with the California JPIA at (562) 631-5449 or firstname.lastname@example.org.
Coverage for infrastructure is often different from coverage for other locations. While some infrastructure is not able to be covered by any property coverage, it is crucial for members to consider whether to schedule infrastructure that can be covered by this Property Program.
If your agency participates in the Authority’s Pollution Program, property schedules are also used as the primary document to capture information needed for this program. By updating your agency’s schedule, two necessary administrative tasks are completed at once. If your agency does not participate in this program and you would like information about this coverage, please contact Jim Thyden, Insurance Programs Manager with the California JPIA at (562) 631-5449 or email@example.com.
Other Optional Coverages
The Property Program also offers Earthquake and dedicated Flood coverage, Mechanical Breakdown, and physical damage for vehicles. These coverages are available for specific property members to report on their property schedules in the AlliantConnect database. If you have questions about these coverages, please contact Jim Thyden, Insurance Programs Manager with the California JPIA at (562) 631-5449 or firstname.lastname@example.org.
If you have any questions or need assistance, please contact Christopher Gray, Account Manager with Alliant Insurance at (949) 660-5944 or email@example.com, or Jim Thyden, Insurance Programs Manager with the California JPIA at (562) 631-5449 or firstname.lastname@example.org.