In my experience, when I sought the exception of the requirement to Wind/Hail deductible, I focused on the importance that the Waiver would demonstrate financial stability to illustrate the ability to sustain losses, claims, or damages that may exceed the current coverage limits. In addition, I found that it was important to use facts such as the compliant coverage being unavailable or too expensive to acquire. Lastly, other factors, such as risk proximity, were also vital in strengthening my request for an exception.
An individual could create an insurance waiver for the following specifications based on the outline given below.
Specifications:
Waiver Type: Renewal/New Origination
Insurance Type: Property
Insurance Term: Wind/Hail - Deductible
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 or type of exception required. The examples provided below can be used for assistance when writing this section.
<Organization/Borrower name> is currently requesting an exception for insurance coverage deductible limits pertaining to <coverage name/details>.
<Agent name> is currently seeking the exception of insurance coverage deductible limits pertaining to <coverage name/details> on behalf of <Organization/Borrower name>.
#2 - What property details should be included in the waiver?
When applying for a waiver, the borrower should provide details about the property. Such details may include the location, number of buildings, and number of stories for each building. The example provided below can be used for further assistance if needed.
<Organization/Borrower name> currently owns <Property name>. The property is located in <Property address> and consists of <number of buildings>, and each building has <number of stories>.
#3 - What coverage details should be included when requesting an exception?
The borrower should ensure that all details about the current coverage in place are included in the waiver. Such details may include the policy name, structure, coverage limits, and deductible limits. Providing these details can help demonstrate a certain extent of compliance. Below is an example that can be of assistance when writing this section.
<Organization/Borrower name> currently has coverage from <Insurance provider name>. The <Insurance coverage 1> has a limit of <dollar amount>, and <Insurance coverage 2> has a limit of <dollar amount>. The total insurable value (TIV) of the property is <dollar amount>. The policy is structured as <policy structure details> and has a deductible limit of <dollar amount>.
#4 - How to emphasize the proximity to risk?
Emphasizing the proximity to risk can determine if the borrower is likely to experience damages that may exceed the current coverage requirements. The proximity to risk can be illustrated using the property’s location and the current season. These factors indicate whether certain natural events that may damage the property are likely to occur. The example below can be used for assistance when writing this section.
<Property name> is currently located in <City, State name>. The <City, State name> is currently classified as <risk classification details>. In addition, the season for <Storm name/type> has passed. These factors indicate that the property is not likely to experience events that result in damages causing coverage limits to be exceeded.
#5 - How to demonstrate compliance efforts?
Compliance efforts can be demonstrated by providing details about the efforts/failure to obtain compliant coverages. Below is an example that can be used for further guidance.
<Organization/Borrower name> has failed to obtain coverage from <number of provider> due to <reason of failure>. The only compliant option obtained is from <Provider name/details>. However, acquiring such coverage would increase premium costs by <dollar amount>.
#6 - How to demonstrate financial stability?
Demonstrating financial stability can help indicate that the organization/borrower is able to account for damages/claims that may exceed coverage requirements entailing the current coverage is therefore sufficient. The example below can be used for assistance if needed.
<Person 1> is currently identified as the guarantor and has a net worth of <dollar amount> and a liquidity value of <dollar amount>. In addition, the <Organization/Borrower name> currently has a cash flow of <dollar amount>.
#7 - How to justify the request for approval?
Prior to submitting the request for approval, the borrower should provide a justification as to why the request should be approved by the concerned department. This justification can be based on the sufficiency of the current coverage and either the lack of availability of compliant coverage or the expense associated with acquiring compliant coverage. In addition, other factors, such as financial stability and proximity to risk, can also be used to strengthen the request for approval.