b'GUEST VIEWInsurance Rates are Moving Up. Are You Prepared?Insurance carriers buy insurance against catastrophic losses, which is known as reinsurance. One carrier noted that its reinsurance costs in high brushfire zones had increased as much as 70% and that the company would be either canceling thoseChrisHipplepolicies or at a minimum passing that increased cost directly onto the consumer.NotonlyhasCOVID-19wreakedThen what happened? A surge ofsummer to a full 12-month season, andselves in a position where they needed havoc on the economy and distribu- camping travel. RV dealers across thesome carriers were hit hard with claimsto take a significant rate hike to stay tion supply lines for goods, but the in- country sold out of stock and a newdue to wildfires. One carrier, which hadprofitable. Even if a carrier was prof-suranceindustryhasalsoseenawave of campers hit the roads in an ef- aprogramforRVparksandcamp- itable, they too were reading the trade COVID-exaggerated response, whichfort to vacation while still social dis- grounds, was hit hard enough that theyjournals and seeing where commercial is rippling through the commercial in- tancing and keeping their living areasexited the market on July 1, 2020.insurance pricing was rising over 20% surance network with varying degreesisolated. Campgrounds across the U.S.Insurancecarriersbuyinsuranceglobally in 2020. They too, took ratebut all clients are seeing rate hikes.experienced record revenues and fullagainst catastrophic losses, which ishikes as a precautionary measure and The RV park and campground in- parks as campers old and new traveledknownasreinsurance.Onecarrierto drive profit. Customers were evalu-surance marketplace was set for ratethe country. Oftentimes, they were stillnoted that its reinsurance costs in highated based on location, prior claims increasesafterapoorlyperformingworking while on the road, as long asbrushfirezoneshadincreasedasexperience and the total insured value, 2019,thenCOVIDhit.Clientswerethey could get good Wi-Fi.much as 70% and that the companyto see if the customer was at-risk to pressing hard to get reduced or re- The rate increases which the insur- would be either canceling those poli- determine whether the carrier would funded premiums on the expectationance carriers needed to stay profitablecies or at a minimum passing that in- offer a renewal, the rate to be charged that travel would be almost nil anddidnt come in 2020. With the surge increasedcostdirectlyontotheandanyothertermsorconditions they would be closed down much ofcamping,especiallywithnoviceconsumer.which are applicable. their season. In some cases, such ascampers, there was a correspondingAdding to the claims pressure is aAreas that were impacted the most California, the Division of Insurancesurgeinclaims.AcrosstheWest,relatively new phenomenon which iswere: properties located in brushfire got involved and forced carriers to re- drought conditions extended the wild- called Social Inflation. This term iszones,anywherecoastalandareas fund premiums.fire season from a few months in theused to describe claims costs that havewith a poor legal climate in which to escalated above general economic in- handle liability claims. If renewal was Real Log Park Model Cabins flation. This includes societal shifts inoffered at all, it was typically with a who the jury feels are best placed to15% to 25% rate hike. If renewal wasnt absorb risks. This was evidenced dur- offered, the agent was left to find re-ing the protests in 2020 when senti- placement coverage at whatever terms ment was that the business ownerswere available.Real Rustic Log Cabinswould not suffer because insuranceThis often resulted in agents placingTurn-Key!would take care of the damage.business with either surplus lines car-Verdicts have gotten larger as well. Ariers or a states FAIR Plan. A statesDurable and Appealingstudy by VerdictSearch showed a moreFAIR plan is a state-mandated, sharedAmish Craftsmanshipthan 300% increase in the frequency ofmarket insurance plan which is de- Pays Off Within 1-3 Years verdicts of $20 million or more in 2019signed to provide coverage for prop-Park Model Cabinscomparedwiththeannualaverageertyownerswhocannotfind Starting at $29,900 from 2001 to 2010. These claims impactinsurance through the traditional mar-public liability as well as auto, workersketplace. Typically,FAIRPlansoffer Located in Lancaster, PA compensation, and directors and offi- less coverage which is more expensive 717-445-5522www.LancasterLogCabins.com cers insurance coverage.thantraditionalpropertyinsurance The insurance carriers found them- carriers. Agents are often finding now that the FAIR plan is very competitive with whats available on the market. The remaining carriers who serve the RV park and campground niche are swamped with quote requests. This is driven by the rate hikes which they are all processing, the number of new properties being developed and the property owners who were canceled. If a park owner is looking to replace their current insurance carrier due to pricing concerns, the first recommen-dation would be to look at what the re-newal terms include. If its simply a price increase, we would suggest that you may want to renew as the entire market is taking rate hikes right now. If there is a coverage concern, or your park has been canceled, you will want to work to secure the best possi-ble coverage at the best price. Contrary to popular belief, this isnt a time when you should go to any and all to try to get the best pricing. Often, multiple submissionsfrommultipleagents make an underwriter feel that they are just one in an endless line of submis-sions and they either put the submis-sion at the bottom of the pile or they simply decline to quote. Remember, they are being flooded with submis-sionsthey can be picky. Our recommended process would be to select the agents which you wish Guest View continued on page 3412 December 2021Woodalls Campground Magazine'