Specifications:
Waiver Type: New Origination
Insurance Type: Property
Insurance Term: Named Storm/Windstorm - Deductible
Template Outline:
#1 - What information should be included in the opening section of the waiver?
The opening section of the waiver should clearly state the requestor’s identity and the purpose/type of waiver being requested. The examples provided below can be used for further assistance if needed.
<Organization/Borrower name> is currently requesting an exception for deductible requirements pertaining to <Insurance coverage name>.
<Agent name> is currently requesting an exception for deductible requirements pertaining to <Insurance coverage name> on behalf of the <Organization/Borrower name>.
#2 - How to provide details about the current coverage in place?
When applying for a waiver, the borrower should provide relevant details about the current insurance coverage they have in place. Providing these details can help demonstrate a certain extent of compliance. It’s important to understand that these details can include provider name, coverage name, type, and limits. Below is an example that can be used for further assistance if required.
<Organization/Borrower name> currently has insurance coverage from <Insurance provider name>. The <Organization/Borrower name> currently has <Insurance policy 1> and <Insurance policy 2> that are structured as <Policy structure details>. <Insurance policy 1> has a per occurrence limit of <dollar amount> and an aggregate of <dollar amount>. In addition, <Insurance policy 2> has a policy aggregate of <dollar amount>.
#3 - How to emphasize the sufficiency of current coverage?
In addition to providing details about the current coverage, the organization/borrower should also emphasize that the current coverage is sufficient. This can be done by providing details about the current coverage types and scenarios in which they are likely to be applied. The example provided below can be used for additional guidance if required.
<Insurance policy 1> currently provided <Coverage type 1>, <Coverage type 2>, and <Coverage type 3>. This broad range of coverages under one policy are currently sufficient for the <Organization/Borrower name> as they can be applied in <Scenario 1> and <Scenario 2>.
#4 - How to elaborate on the deficiency of the current deductible?
The organization/borrower should also elaborate on the deficiency of the current deductible, as it can help improve the chances of the exception request being approved. Such details may include the property’s current total insurable value (TIV), the current deductible limit, the required deductible limit, and the extent of non-compliance between the two. Below is an example that can be used for further assistance if required.
The current total insurable value (TIV) is <dollar amount>, and the <Organization/Borrower name’s> current insurance policy has a deductible of <deductible amount/percentage>. However, the required deductible for such a coverage is <deductible amount/percentage>. Therefore, the <Organization/Borrower name’s> current insurance coverage deductible is only deficient by <deductible amount/percentage>.
#5 - What information should be included to demonstrate compliance efforts?
When writing the waiver, the borrower should also provide details about the efforts they made to increase their current state of compliance. Such efforts may include seeking insurance coverage options with compliant deductible limits and having an aggregate retention fund. Provided below is an example that can be used for guidance to structure this section.
Although <Insurance policy 1> and <Insurance policy 2> with a deductible of <deductible amount/percentage> are sufficient for the <Organization/Borrower name>, efforts to acquire coverage with a compliant deductible have been made. The <Organization/Borrower name> has obtained quotes from <Insurance provider 1> and <Insurance provider 2>, however, acquiring the coverage would lead to additional premium costs of <dollar amount>. In addition, the <Organization/Borrower name> currently has an annual aggregate retention of <dollar amount>.
#6 - How to demonstrate financial stability?
Financial stability can be demonstrated by providing details about the organization/borrower’s net worth and liquidity. This can help demonstrate that the organization/borrower is able to account for damages or losses/claims despite the deductible limit of their current coverage. Below is an example that can be used for additional guidance if needed.
The <Organization/Borrower name> currently has a net worth of <dollar amount> and liquidity value of <dollar amount> and is, therefore, able to account for damages or losses/claims in excess of the coverage limits of <dollar amount>.
#7 - How to justify the exception request for approval?
Before submitting the waiver, the borrower should provide a justification as to why their exception request should be approved. This justification can be made on the financial stability of the organization/borrower and the sufficiency of the current coverage. In addition, the organization/borrower may also provide information on the extent to which their current deductible is deficient. Furthermore, factors such as low loss/claim history and low risk can also be used to strengthen the exception request.