Specifications:
Waiver Type: Renewal/New Origination
Insurance Type: Property
Insurance Term: Blanket Policy - Limit is no less than the largest Replacement cost exposure.
Template Outline:
#1 - What information should be included in the introductory section of the waiver?
The introductory section of the waiver should clearly state the requestor’s identity and the purpose/type of exception being requested. Below are some examples that can be used when writing this section.
<Organization/Borrower name> is currently seeking the exception of coverage requirements pertaining to the Blanket insurance coverage. These requirements include <coverage requirement details>.
<Agent name> is currently requesting the exception of Blanket insurance coverage requirements on behalf of <Organization/Borrower name>. These requirements include <coverage requirement details>.
#2 - What property details should be provided when applying for a waiver?
When applying for a waiver, the borrower should provide all details pertaining to the properties involved. Providing such details can help understand how the insurance coverage applies to the properties and the risk associated with them. The example below can be used for further assistance if needed.
<Organization/Borrower name> currently owns <Property name> located in <City, State>. The <Property name> currently has <number of buildings>, each of which has <number of stories>. These buildings are spread out among <City 1>, <City 2>, <City 3> in <State>. The locational details pertaining to each building part of <Property name> are as follows <locational details>.
#3 - How to emphasize the current coverage when applying for a waiver?
The borrower should provide all details pertaining to the current coverage they have in place. These details can help demonstrate a certain extent of compliance. When providing these details, it’s important to include the provider name, policy name, types, structure, coverage limits, and the total insurable value (TIV) of the property. Below is an example that can be of additional guidance when writing this section.
<Property name> is currently insured by <Insurance Provider name>. The <Property name> has a <Insurance policy name> policy that covers all locations pertaining to this property. <Insurance coverage name> has a coverage limit of <dollar amount> with no policy caps or margin clauses and is structured on a <policy structure details> basis. As of <date>, the total insurable value (TIV) is of the <Property name> is <dollar amount>.
#4 - How to elaborate on geographical dispersion and risk association?
When writing the waiver, the borrower should use the property’s locational details to illustrate that the buildings are located over a vast geographical horizon. Demonstrating this fact can help determine that the organization/borrower is at a lower risk of experiencing losses at all buildings. Therefore, the current coverage limit will not be exhausted. The example provided below can be used for further assistance if required.
As mentioned, the <Property name> consists of <number of buildings> that are spread across <City 1>, <City 2>, and <City 3>. Due to such geographical dispersion, the <Organization/borrower> is not likely to experience an event where all buildings undergo a catastrophic event. Therefore, the <Organization/Borrower> is at a lower risk of exceeding the current <Insurance coverage> limit of <dollar amount>.
#5 - How to demonstrate financial stability when applying for a waiver?
Borrowers should understand that demonstrating financial stability is highly important as it can help showcase their ability to account for losses/damages that exceed coverage requirements. Financial stability can be demonstrated by providing details about the borrower's net worth and liquidity values. Below is an example that can be used for additional guidance when writing this section.
<Property name> is currently owned by <Organization/Borrower name>. As of <date>, the <Organization/Borrower name> has a net worth of <dollar amount> and a liquidity value of <dollar amount>. Therefore, the <Organization/Borrower name> is in an adequate position to account for damages that may exceed the current <Insurance coverage> limit of <dollar amount>.
#6 - How to provide a justification for the request for exception?
The borrower, prior to submitting the waiver, should also provide a justification for why their request for exception should be approved. When provided this justification, the borrower can use the geographical dispersion of the assets to demonstrate being at a lower risk of facing multiple catastrophic events that may exhaust coverage limits.
In addition, the borrower can also provide details about their net worth and liquidity to show that they are in a financial position to account for damages that may exceed coverage limits. Furthermore, the justification can also be made on other factors, such as the details about the current coverage and previous approvals for similar requests.