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Insurance for Owners Changing Lender Requirements

Insurance for Owners Changing Lender Requirements. Presented by Holly McCormick of James G. Parker Insurance Associates, Inc. September 16, 2014. Carrier rating criteria CMBS (if Lender will be using Standard & Poors as the rating agency):

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Insurance for Owners Changing Lender Requirements

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  1. Insurance for OwnersChanging Lender Requirements Presented by Holly McCormick of James G. Parker Insurance Associates, Inc. September 16,2014

  2. Carrier rating criteria • CMBS (if Lender will be using Standard & Poors as the rating agency): • Loans under $20MM = A- by S&P or A- X by AM Best’s or A3 by Moodys • Loans over $20MM = A- by S&P • Multi-layered programs for loans over $20MM • 4 or fewer carriers = 75% must be A- rated by S&P with the balance no lower than BBB • 5 or more carriers = 60% must be A- rated by S&P with the balance no lower than BBB

  3. Carrier rating criteria • Fannie Mae = A- VI by AM Best’s • Freddie Mac = A- by S&P or A- by Fitch or A 3 by Moodys or the applicable AM Best’s rating below: • Loans under $5MM = A- VII by AM Best’s • Loans over $5MM but under $25MM = A- VIII by AM Best’s • Loans over $25MM = A- VIX by AM Best’s • Portfolio Lenders = Typically A- VIII by AM Best’s, but will vary by lender.

  4. Blanket Policies and Loss Limits • Flood • FEMA is remapping everything since Katrina/Rita/Wilma, Irene & Sandy • NFIP now provides up to $500,000 per building for commercial and habitational properties • Deductibles collectively cannot exceed $100,000 per occurrence • Surveyor prepared Elevation Certificates • Letters of Map Amendment – when should you apply

  5. Named Windstorm - Tier I Counties • The entire state of Florida is a single Tier 1 County • Anything else within 25 miles of a coastline in high wind areas • Terrorism Caps = if TRIA/TRIPRA is not renewed 12/31/14 • FEMA 200% of the then premiums for all other coverages required

  6. General Liability – Capped Aggregate Programs • Think $1,000,000 per covered location on average • Zoning • Legal non-conforming structures = Ordinance & law coverage • Legal non-conforming uses when the loan amount excess the replacement cost value = zoning protection coverage

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