Options for Insurance Benefit Park Owners
How to be a Smart Business Insurance Consumer
Campground owners have a lot of carrier options for business insurance. Park owners can benefit from market competition; improving coverage, service and premiums. Since insurance is an annual expense and a financial tool that protects your park’s assets, understanding the ins and outs of reviewing your professional and coverage options gives you a financial advantage. To help you be a smart business insurance consumer this article will explain the number of options available, outline the difference between a carrier and a broker, describe how the broker you choose affects the coverage you obtain and your ability to access a carrier, tell you what to ask when choosing a broker and give you some insurance insider tips.
Today there are at least four national carriers plus a handful of state and regional carriers serving campgrounds. This is in stark contrast to the 1980s, when campground owners could not get insurance coverage and joined together to form the now defunct Evergreen Insurance. However, not all brokers have access to all carriers. And not all carriers will have an appetite for your unique park. So how do you get the best coverage, service and premiums for your park?
Insurance carriers (also referred to as insurance companies) are the underwriters who insure the risks faced by the campground policyholder for a premium. In exchange carriers pay claims in event of a covered loss. To clarify, sometimes the insurance carrier will partner with a managing general underwriter – thus McNeil underwrites and issues campground policies for Arch Insurance Company and K&K underwrites and issues policies for National Casualty Insurance Company. Either way you need a broker to access the carriers.
Carriers distribute their insurance policies to the public through brokerages and agencies; professionals who work directly with campgrounds to take applications outlining the risks at each park, guide and recommend appropriate coverage and market the parks to various carriers. The broker is one of your three key professional partners – along with your attorney and accountant. (Full disclosure: I am a program manager at a leading campground brokerage and I also worked for a leading national carrier). Ideally, the broker will act as an extension of your campground office – crafting the appropriate coverage on the applications for insurance with you based on what you do and what you own (your exposures).
Choosing a broker first before you apply for insurance is important, I will explain why in the insurance insider tips section. Here are questions you can ask when interviewing potential brokers:
- Which carriers do you represent for Campground insurance?
- How much campground business do you place with each carrier?
- Do you have a preferred carrier? If so, why?
- Do you have any exclusive carriers for campgrounds in my state?
- Do the carriers you use offer any special campground coverage in their policies? Do they have an appetite for a park like mine? (describe special features, size, location and loss history)
- What is the financial rating of the carriers you work with? (Independent Insurance analyst A.M. Best has a letter rating for carriers to reflect solvency. Generally speaking A- and above should be the standard – for example many firms will not place coverage with a B rated carrier).
- What additional benefits or professional services does your brokerage offer to me?
- Tell me about the review process, service, claims and renewals.
Insider insurance tips:
- Certain carriers want campgrounds like yours and others don’t. Some carriers won’t look at parks by the coast, others have minimum premium thresholds, and many have specific appetites for certain activities. You benefit when your campground application gets in front of a carrier with a strong appetite for your unique park.
- A carrier can only issue one quote for your campground. So, if you go to three brokers who all tell you they are going to approach the same carrier on your behalf you will not benefit from three quotes. Take control as the applicant and choose your broker first – assigning carriers for him to approaches on your behalf.
- Carrier assignment letters, also called broker or record forms or BORs, should be explained to you before you sign them. These are letters or forms that assign a carrier market to a specific broker. If these are “slipped into the paperwork to sign when applying for insurance,” it is a red flag. A transparent explanation would be to clearly state that “only one broker can approach this carrier market and by signing this form you are assigning our brokerage to be the broker of record for this carrier market.”
- Rates are different than exposures. If you double the size of your park and your premiums double, that is not a rate increase, it’s an exposure increase. When everything is the same and your premiums go up, it’s a rate increase.
- Shopping your insurance every single year is also a problem. Brokers know this. Why? Because after a while the carriers will not want to quote a park that goes out to bid every year but never comes on board or won’t stay at least a few years. The cost for the insurance industry to underwrite a new policy is more than to renew. A desirable risk for a carrier to take is a park that will stay on board a few years. However not reviewing options is also a liability.
Today’s insurance market for campgrounds is robust. Understanding that there are many options available to you as a park owner and knowing how to be a smart consumer will help you find the professional and the policy you need so your park can benefit.
This article by Irene Jones was published in the Northeast Campground Association's Winter 2019 Newsletter
Irene Jones is a Program Development Manager at Marshall & Sterling Insurance Brokerage with their Campground and Hospitality Insurance Program. She holds an Associate in Risk Management designation and has over twenty years’ experience in business insurance on both the carrier and brokerage sides of the insurance industry.