Insurance carriers evaluate far more than the basic description of a property. The age of the roof, electrical system, plumbing, HVAC, proximity to a fire hydrant, maintenance history, public listings, marketing language, and ownership structure can all affect whether coverage is offered and how much it costs. Cody Wiswasser and Mahmoud Faisal Elkhatib discuss how insurers interpret risk, why older Chicago buildings face a difficult market, and how the right broker can help property owners present their operations accurately before a carrier says no.
Property owners often believe that an insurance application is a simple list of facts followed by a price. In reality, the carrier is evaluating how likely the property is to generate a claim and whether the information presented matches what the carrier can find elsewhere.
The building, the ownership structure, the operations, the maintenance history, and even the words used to describe the property can influence the decision. A property may be well managed but still appear risky when the carrier does not understand how it is being operated.
The difference between what an owner actually does and what the carrier thinks the owner does can determine whether coverage is offered.
Insurance concerns can affect a purchase, refinance, renovation, or closing. EV Häs helps Chicagoland property owners and investors identify legal and operational issues that may complicate ownership, financing, and the transaction before those issues become more expensive.
Mahmoud Faisal Elkhatib is a Chicagoland real estate and foreclosure attorney, investor, entrepreneur, and former real estate broker. His work includes real estate transactions, foreclosure matters, building code cases, and complicated property disputes.
Through The Bow Tie Edge, Mahmoud brings together professionals who can explain the risks that exist beyond the purchase contract, including insurance, title, financing, construction, and property management concerns.
Cody Wiswasser is an insurance broker with Community Partners Insurance. His work includes helping property owners and organizations find coverage for risks that may appear unusual, complicated, or difficult to place with traditional carriers.
Cody focuses on understanding how the client actually operates and translating that information for the insurance market. His goal is to help the carrier evaluate the real risk rather than making a decision based on an incomplete or inaccurate impression.
When a carrier evaluates a building, several recurring questions appear. The insurer may ask when the electrical system, plumbing, HVAC, and roof were last updated. Cody describes these areas as some of the most important indicators of the building’s physical risk.
The carrier may also consider the property’s proximity to a fire hydrant, the age and type of construction, the number of units, and how the property is being used.
Recent updates may improve the presentation of the risk, but the owner should be prepared to document when the work occurred and what was replaced. A general statement that the building was renovated may not be enough.
Carriers want specific evidence that the systems most likely to cause a loss are being maintained.
Insurance carriers may review websites, property listings, prior sale information, photographs, and other publicly available material. Cody explains that a carrier may compare the application with images found through a real estate listing or another online source.
This creates problems when marketing language and insurance language communicate different things. Calling a building luxury may attract tenants or buyers, but it may also suggest more expensive finishes, higher claim values, or occupants who are more likely to pursue a dispute.
Digitally staged photographs can create another issue. If the image alters an outlet, appliance, balcony, grill, or other feature, the carrier may interpret the picture as evidence of a safety or code problem.
Anything published about the property may become part of the carrier’s understanding of the risk.
An owner may improve a property in a way that appears safer or more convenient but creates concern for the carrier. Cody gives the example of a natural gas grill connected directly to the building’s gas supply on an exterior deck.
The owner may view the installation as similar to an outdoor stovetop. The carrier may see a gas appliance on a balcony and immediately identify a fire or explosion concern.
Terraces, decks, structural modifications, and other additions can create similar questions when architectural plans, permits, or engineering information are unavailable. The improvement itself may not be defective, but the carrier needs enough information to understand why it should not be treated as an unacceptable risk.
Cody explains that insurance brokers generally operate through different market structures. A captive broker represents one primary carrier. An independent broker may have access to several carriers and can compare options across a broader marketplace.
An independent broker may be useful for older properties, larger portfolios, unusual operations, or risks that require a detailed explanation. A captive carrier may still offer strong pricing for a straightforward property that fits its preferred underwriting profile.
Cody recommends avoiding multiple independent brokers approaching the same carriers at the same time. When two brokers submit the same risk, the carrier may recognize only the first submission and block the other broker from obtaining a quote.
More brokers do not always create more options when they are competing for access to the same insurance companies.
Chicago contains many masonry buildings that are several decades old or more than a century old. Even when those properties are well maintained, some carriers apply broad age restrictions and decline buildings beyond a certain construction year.
A complete renovation of the electrical system, plumbing, HVAC, and roof may help, but not every carrier evaluates an updated older building the same way. Some companies will reconsider the risk. Others continue to focus primarily on the original construction date.
When traditional carriers decline the property, the owner may need to explore a specialized insurance market. Cody explains that these options can provide coverage for difficult risks, but the pricing, policy terms, and protections may differ significantly.
The availability and price of insurance can affect whether an older condominium or multifamily transaction remains financially workable.
A low premium does not help when the policy excludes the risk that actually causes the damage. Property owners should understand what is insured, what is excluded, and what information the carrier relied upon before depending on the policy.
A carrier may respond more favorably when the owner can demonstrate a consistent maintenance process. Cody recommends documenting inspections, repairs, management practices, roof reviews, and the condition of the property grounds.
The review should extend beyond the interior of the building. Trees, sidewalks, exterior structures, windows, drainage, and nearby hazards may also create claims. A tree owned by the city can still damage the building if a branch falls or strikes a window during severe weather.
A documented maintenance routine helps the broker explain that the owner is actively reducing risk rather than waiting for a loss to occur.
The objective is not only to satisfy the carrier. Regular inspections and maintenance also protect the property, the occupants, and the owner’s investment.
Carriers commonly request information about the age and condition of the roof, electrical system, plumbing, HVAC, construction type, number of units, occupancy, and recent renovations. They may also ask about fire protection, claims history, and property management practices.
Yes. Carriers may review property listings, websites, photographs, prior sale records, and other publicly available information. Details that conflict with the insurance application can create additional questions or affect the underwriting decision.
A captive broker generally represents one primary insurance company. An independent broker can usually approach several carriers and compare available coverage. The better option depends on the property, the operations, and the complexity of the risk.
Not necessarily. Frequent changes may create uncertainty for future carriers and can make the insurance history more difficult to evaluate. A broker should compare the renewal with the broader market and recommend a change when the pricing or coverage no longer serves the owner.
The owner can maintain records of renovations, inspections, roof reviews, repairs, property management procedures, and risk reduction efforts. Clear documentation helps the broker explain why the building should be evaluated based on its current condition rather than its age alone.
