Your Commercial Insurance Renewal and What College Football Has to Do With It
It’s that time of year when pundits release their way-too-early college football rankings. Teams with no business winning a national championship suddenly win it, “on paper”. Living in Alabama, surrounded by two of the most results-obsessed programs in the country, I’ve learned to say “I’ll believe it when I see it.”
I get that same feeling when someone tells me we’re back in a soft market for commercial property insurance.
In a soft market, carriers compete for your business, rates flatten or fall, and coverage is easier to find. Recent industry data backs the headline: commercial property rates are down 5–10% on most non-residential buildings.
Part of what’s driving the soft market is there’s significant private equity capital flowing into the insurance carrier space right now. New capacity means new competition. Think of it like NIL money changing college recruiting. The two-star prospect from Louisiana who used to choose between ULM and Louisiana Tech can now start a bidding war and land a $50,000 deal at a Power Four school.
The same dynamic is playing out at renewal. A less-than-exceptional broker can produce a 12% rate decrease just by stirring up competition among new market entrants. That sounds great until you read the forms and realize what got carved out to get there. In a soft market, the lowest number isn’t always the best deal. Make sure your broker knows the difference.
So we’re all saving money this year, right? As the late great Lou Holtz would say, “not so fast my friend!”
The soft market headline is as misleading as a preseason top-five ranking. Here’s what’s actually shaping your renewal.
Your Roof Is Getting Scouted Like a Five-Star Recruit
Carriers stopped trusting the roof age on your application somewhere around 2022. They verify it themselves now, using satellite imagery and AI tools. And the age thresholds haven’t loosened with the market:
- Under 15 years: typically no special requirements
- 15–20 years: expect inspection demands, depreciated-value coverage, or a wind/hail exclusion
- 20-plus years: the hardest band — standard markets often pull back, and the ones that stay may attach a percentage deductible or move you to depreciated coverage
That percentage deductible matters more than people realize. On a $20M property with a 5% wind/hail deductible, you’re paying the first $1 million out of pocket before the carrier pays anything. That’s a big change from where wind deductibles used to fall a few, short years ago.
Where You Play Matters
Alabama isn’t one insurance market, it’s three, and your geography determines your problems.
Coastal Alabama (Mobile and Baldwin County): Named-storm exposure drives everything here. Most standard carriers won’t write windstorm on commercial property near the Gulf, so wind coverage moves to the E&S market — specialty carriers who operate outside standard market rules. Expect named-storm deductibles starting at 5% of total insured value.
Central Alabama (Birmingham, Hoover, Tuscaloosa): Convective storm meaning tornadoes and hail are the underwriting story. Roof age is the dominant lever here. The March 2025 outbreak is still fresh in carrier loss data, and they’re underwriting accordingly.
North Alabama (Huntsville, the Tennessee Valley): Tornado severity, not just frequency, is hardening terms. Expect questions about storm shelter plans and tornado-resistant construction that didn’t come up five years ago.
The Liability Squeeze on Apartments and Hotels
Here’s where something like a bad targeting call enters the picture. When liability claims go to a jury, juries tend to side with the individual over the property owner. The industry calls these results “nuclear verdicts,” multi-million-dollar awards that may or may not reflect the actual facts. Carriers ultimately pass these costs on to everyone.
The practical result: most standard carriers have stopped writing general liability for multifamily altogether. Coverage has shifted to the Excess & Surplus insurance market. Assault and battery (a fight, an attack, a shooting on the premises) is commonly excluded or capped at a small sublimit.
For hotels, premises liability claims are routinely producing verdicts over $10 million. Even a clean claims history doesn’t protect you if you’re in the wrong city or the wrong brand tier.
Your Building Values Are Probably Wrong
Industry estimates suggest roughly three-quarters of commercial properties are underinsured by 40% or more. Construction costs are up around 40% from pre-2020 levels, and most policies haven’t kept pace.
If you are underinsured, your claim can trigger the coinsurance clause, which is the rule that requires you to insure at least 80–90% of actual rebuild cost. Miss it, and the carrier reduces your payout on any claim, not just a total loss.
Quick example: you own an apartment complex insured for $5M. After a hailstorm, you have $500K in damage. If it would actually cost $7.5M to rebuild, your coverage is only 67% of what it should be. The carrier pays 67% of the claim (about $335K) and you absorb the rest. The deductible comes off the top of that.
A rate decrease on the wrong limit is still the wrong policy.
The Smart Moves Before Renewal
Start the conversation 90-plus days out. Get a current roof inspection on file. Document your loss controls like lighting, cameras, and security audits before the submission goes out, not after the quote comes back. And don’t accept the first quote from your agent. A softening market means your agent should be actively marketing the account and proving the results
Preseason rankings don’t win championships. If you want to know where your program actually stands, I’m happy to take a look.
Dan Wentz | Commercial Real Estate Insurance Leader and ACRE 100 Leadership Council Member | USI | 205-251-9729 | dan.wentz@usi.com
