Hurricanes, Tropical Storms, and Captive Insurance

On September 13, we'll be discussing how to use a captive for the newly emergent Cannabis industry.  You can sign up at this link.

I live in Houston, Texas, and have lived through three hurricanes.  First was hurricane Rita, which barely hit my part of the city.  Ike was the polar opposite; we didn't have power for three weeks.  But during Harvey we thankfully didn't lose power and had cable throughout (which allowed me to binge watch Mad Men).

As of this writing, Tropical Storm Florence is moving towards the U.S.' east coast, which serves as a reminder of the captive insurance/property nexus.

How can a captive help with hurricane related coverage?  The standard way is to have the captive underwrite a large deductible for the third-party carrier, essentially turning the commercial policy into an excess layer of risk.  This should lower the cost of third party insurance somewhat.  Most importantly, it puts the insured in charge of the claims process, expediting the disbursement of funds and allowing the insured to start repairs faster.  The insured can also write a "DIC" or "difference in conditions" policy to supplement his property coverage.  Finally, the captive could also provide an excess policy for his commercial coverage.  

So, if you own real estate, consider a captive for some of your property risk.  Please call us at 832.330.4101 to learn more.