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Looking for New Solutions

J. Ladd Howell, president of the Howell Companies in Miami Lakes, knows all about the problems property insurance is causing Florida’s real estate buyers.

In addition to dealing with the problem with his clients, Howell is a member of the Industrial Association of Dade County. He and his fellow members routinely swap stories about the challenges of guiding their clients through the property insurance maze.

“We’ve already begun to hear some reports of really high insurance premiums,” Howell says. “No, we weren’t surprised to hear them, not after being in this business as long as we’ve been in it, but we were dismayed.”

The industrial association earlier this summer held a roundtable discussion with bankers, insurance agents, property owners and brokers, all of whom gathered to talk about property insurance.

The problem was that, at the end of the meeting, no one had come up with any real solutions to the problem.

Howell does have some advice for his fellow real estate professionals: Sometimes you have to be creative, and it may take a lot of hard work, research and persistence to help clients obtain affordable property insurance.

Consider what Howell recently went through to ease a major property insurance hit. Howell sits on the board of a two-building office condominium in Miami. He recently received notice that the premium for property insurance on this two-year-old building was scheduled to jump from $24,000 a year to $57,000. Howell didn’t panic. He went to work.

He sat with his insurance agent and first corrected the stated square footage of the building from a recorded 32,000 square feet to the actual 28,800 square feet it covered. He and his agent then obtained an estimate for rebuilding all 28,000 square feet in the worst-case scenario of both buildings being leveled at $80 a square foot instead of the figure of $120 a square foot that was being used by the insurance company.

These actions reduced the premium to $37,000 a year. This was still a 54 percent increase from the previous year, but was at least more palatable to the condominium owners than the original proposed increase of 137 percent.

The lesson? Sales associates may be able to lower their clients’ property insurance bills. They must be willing, though, to put in the hard work necessary to do so.

“Too often, people give up and just pay the high bills,” Howell says.

“They get the bill, grouse about it and then pay. All we did in our situation was sit down with our insurance agent and try to figure out what the insurance company was basing its fees on. My advice to other professionals? They have to do the same thing we did and work to make sure their clients are being charged on accurate assumptions.”