Property insurance rates rise as pandemic affects still felt

Property insurance rates continued to rise for 10 consecutive quarters as the impact of COVID-19 still affects industries including the property insurance market, according to the “2020 Property Market Dynamics” report by Aon.

“Although property insurance rates showed a slight decrease during the first quarter of 2020 compared to the fourth quarter of 2019, we are facing the longest period of rate increases since 2001,” Karla Ruiz-Cofresí, commercial risk manager at Aon, said, NewsIsMyBusiness.com reported.

Insurers have been more rigorous setting underwriting requirements and even more selective in the risks they take, Ruiz-Cofresi said.

Clients continue to be conservative, sticking to the same coverage limits. Policyholders ask for information about the markets’ risk capacity. And they want to learn about innovative products they can apply to their operations, she told NewsIsMyBusiness.com.

The Aon report said the market conditions will continue throughout the rest of the year because of the economic impact of the coronavirus. The chance that losses will increase, and these conditions continue into 2021, increases in part due to an active Atlantic hurricane season.

Aon considered the impact of the coronavirus on insurance coverage since the outbreak in Wuhan, China, was made public in late December 2019. But cyber risk has become important with the additional problems remote work adds to IT risk policies, Ruiz- Cofresí told NewsIsMyBusiness.com.

The industry has stated physical loss or direct damage to property that comes from an insured danger is required for a claim. A virus is not seen as a direct physical loss or to the insured property by some insurers. Policyholders may not get to claim losses or damages related to cleaning an insured property affected by a contagious disease.