Frequent calamities impact GRF’s 2024 insurance costs
FROM THE GRF
Insurance industry giants have recently pulled back from California’s home insurance marketplace, saying that increasing wildfire risk and soaring construction costs have prompted them to stop writing policies in the state. That industry’s unease has now come to Leisure World in real world terms.
After GRF’s insurance broker sought competitive bids from scores of companies, the GRF was notified on Nov. 29 of its 2024 insurance costs, just two days before GRF’s commitment for the 2024 payment was due. They dramatically exceeded the expectations GRF Finance professionals built into GRF and Mutual budgets.
GRF and Mutuals try to get the best deal by combining their insurance needs. Those needs include liability and property coverage for all the Mutual properties as well as GRF Trust properties, including all its vehicles. Additional coverages are needed for a myriad of other things, such as cyber attacks, pollution, mold and asbestos claims.
Only the liability and property coverage-related costs have taken a jump, and that jump has been substantial. They drove the total insurance premium from 2023’s $2.87 million up to $5.14 million for 2024. GRF and Mutual budgets, which are prepared in the summer before the fiscal year begins in January, factored in $370,000 in premium increases, far below the $2 million jump GRF was finally quoted. Both Mutual and GRF boards are considering options to accommodate this shock to the system.
As GRF works through the financial burden this will cause, it might help to know what is to blame. After all, Leisure World hasn’t had any forest fires, tornadoes or floods lately. GRF sees traffic accidents, along with a steady diet of trip-and-fall claims. People get hurt and they find the deepest nearby pockets to sue; often that’s GRF.
But mostly it has been the statewide calamities that have spooked the insurance carriers. Now, if GRF wants them to insure this community going forward, it must pay the going price. Anticipate further information will be shared in the coming weeks as GRF staff and board members develop their responses.
