Citizens is announcing that policyholders may see changes in their renewal coverages due to a recent deflation in construction costs. We are also reminding agents about the single-building rule regarding a single building owned by multiple entities.

Possible Decrease in Renewal Coverage Limits

Citizens’ underwriting rules require that commercial buildings be insured based on 100% of the replacement cost value. Due to recent decreases in construction costs, policies renewing as of November 1, 2023, may provide a lower limit of insurance and/or total replacement cost than the prior term. If there is more than one building insured on the policy, more than one building may have a lower limit of insurance.

An Important Notice Regarding Coverage Limits in Your Renewal Offer is included in the policyholder’s renewal package. The notice advises policyholders that if they would prefer to renew their policy with no change in their current coverage limits, they should contact their agent for assistance.

Notes:

• An updated appraisal is not required to change the renewal coverage limits back to the current coverage limits.
• For certain policy types, Citizens insures only the first million or $2.5 million of coverage for a building with a replacement cost higher than these limits. While the replacement cost may have decreased, the limit of insurance for these buildings may not be reduced due to first-loss rating rules.
• Policyholders who renewed as of November 1, 2023, may already have a lower limit of insurance and/or total replacement cost, prior to this communication being sent.

Commercial Residential Condominium Association with Multiple Entities

For Commercial Residential policies, Citizens’ single building rule/definitions are designed to insure multiple connected buildings that are owned by the same legal entity.

In certain unique scenarios, there may be more than one visually identifiable building connected via an above ground or below ground parking garage or other structure where each building has separate ownership.

Example: If two towers owned by a single legal entity are connected by a parking garage owned by a separate legal entity, the single building rule/definition would typically require these two towers be considered a single building due to being connected.

For these situations, contact Underwriting to discuss the possibility of insuring such risks.

Resources

• View FAQ 4395, located on the Trending FAQs on the Agents site.
• View the Policy Change Job Aid for submitting a policy change in PolicyCenter® for Commercial Lines.
• Go to the Training page and select Commercial Job Aids > New Business to access the Commercial Lines New-Business Submission Guide and Uploading and Linking Documents.
• View the Important Notice Regarding Coverage Limits In Your Renewal Offer for Commercial Lines, which can be accessed by logging in to the Agents site, selecting Commercial, and selecting the appropriate notice under Policyholder Notices.

Manuals

• Log in to the Agents site, select Commercial, choose a policy type, and then select the Manuals link from the center menu.