In my experience with waivers, I found that each one required waiving off the replacement cost valuation or the All Risk coverage requirements related to the property coverage. The replacement cost valuation refers to the amount you will need to spend on material/supplies in order to carry out repairs/replacements in your property. You should keep in mind that these costs are calculated at the current market value. On the other hand, the All Risk Coverage covers the risks that are not excluded from the contract.
In my opinion, it is important to mention the details regarding why the waiver cases are unable to acquire the complaint coverage. Furthermore, I noticed that the information about the applicant's net worth, liquidity, and replacement reserve should also be provided. In my opinion, this information is very helpful for FM in understanding your coverage limits and your ability to spend your capital for uninsured losses. I think that your waiver request can be further strengthened through factors such as seeking complainant coverages, acquiring one at renewal, and the time left until renewal.
Specifications:
| Waiver Type: | Renewal/New Origination |
| Insurance Type: | Property |
| Insurance Term: | Property Damage - Cause of Loss Form |
Template Outline:
#1 - How should the introductory section of the waiver be written?
The introductory 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 seeking a waiver for insurance coverage requirements pertaining to <Insurance coverage name>. These requirements include <Requirement details>.
<Agent name> is currently seeking the waiver of insurance coverage requirements regarding <Insurance coverage name> on behalf of <Organization/Borrower name>. These requirements include <Requirement details>.
#2 - What details about the current coverage should be provided when writing a waiver?
When writing a waiver, the organization/borrower should provide all relevant details about the current coverage they have in place. These details can include the coverage name and limits. In addition, the organization/borrower can also mention the valuation method for the replacement/repair costs the coverage currently has. Provided below is an example that can be used for additional guidance if needed.
<Organization/Borrower name> currently has <Insurance coverage 1> and <Insurance coverage 2> from <Insurance provider name>. These coverages currently have limits that amount to <dollar amount>. As per the policy, the cost of replacement is currently based on <Actual cash value/Replacement cost>.
#3 - How to mention why the organization/borrower does not have compliant coverage?
In addition to providing details about the existing coverage, the organization/borrower should also emphasize why they don’t have compliant coverage. Reasons for not having compliant coverage may include lack of availability or the unwillingness of the current carrier. Below is an example that can be used for further assistance if needed.
<Organization/Borrower name> has currently talked to <Insurance provider 1>, <Insurance provider 2>, and <Insurance provider 3>. However, all these carriers are not willing to offer the compliant coverage. In addition, the <Organization/Borrower name>’s current carrier, <Insurance provider name>, is also not willing to rewrite the policy so that it may become compliant.
#4 - How to emphasize the compliance efforts made by the organization/borrower?
The organization/borrower should also provide details about the efforts they have made to ensure compliance. These efforts can include ensuring that all other aspects of the coverage are compliant. In addition, they can also include efforts to make sure that compliant coverage will be acquired upon renewal. Provided below is an example that can be used for additional guidance if needed.
Apart from the <Non-compliant aspect> of the current coverage, all other coverages from <Insurance coverage 1> and <Insurance coverage 2> are fully compliant with <Compliant coverage details>. In addition, the <Organization/Borrower> will acquire compliant coverage of renewal of the policy, which is currently expected on <Date>.
#5 - How to demonstrate financial stability when requesting a waiver?
When writing the waiver, the organization/borrower should provide details about their or their sponsor’s net worth and liquidity. In addition, details about the existence of a replacement reserve fund and the amount of the fund should also be provided. This information can help determine that the organization/borrower has the ability to account for expenses that exceed the current coverage limits. The example provided below can be used for further assistance if needed.
<Organization 1/Person 1> has been identified as the sponsor of <Organization/Borrower name>. As of <date>, <Organization 1/Person 1> has a net worth of <dollar amount> and a liquidity value of <dollar amount>. In addition, the <Organization/Borrower name> also has a replacement reserve fund with a total of <dollar amount>. Therefore, the <Organization/Borrower name> is able to account for expenses that exceed the current coverage.
#6 - How to provide a justification for the waiver being requested?
Before submitting the waiver, the organization/borrower should provide a justification as to why the waiver should be accepted. When providing the justification, the organization/borrower should mention that the compliant coverage is currently not available in the market and their current carrier is unable to offer it.
In addition, they should also provide details about their or their sponsor’s net worth and liquidity. Furthermore, the organization/borrower should also mention the amount they have in replacement reserves. This information can help demonstrate financial stability and can further improve the chances of the waiver being approved.
