Answering Resort Operators’ Key Insurance Questions

After hurricanes devastated areas of Florida and North Carolina, Resort Trades Publisher Sharon Scott Wilson, RRP, interviewed Matt Stauffer, VP of Gregory & Appel Insurance — independent risk management advisor. In this video, Stauffer addresses current issues being faced by resort operators. Some key highlights include:

• Risk Management: How to reduce exposure and secure better terms with insurers • Customized Insurance.: Tailoring solutions specifically to address unique risks faced by resorts and timeshares
• Alternative Solutions: Exploring more flexible coverage options.
• Premium Reduction: The role of targeted risk management and strategic marketing
• Comprehensive Coverage: How much is enough?

Stauffer’s experience has been to partner with clients to help alleviate risk, strengthen resilience, and uncover pathways for continued growth and success. Here is an abbreviated transcript of our conversation. If you’re more of a listener, you’ll find the interview on the Resort Trades YouTube channel.

SHARON: After seeing the devastation of hurricanes that Were Striking in Florida and North Carolina recently, resort operators are thinking about insurance in a whole new light. We’re hoping to clarify some key insurance questions that you may have as you operate your property.

I’m Sharon Scott Wilson I’m editor and publisher of Resort Trades. We’re a Media Group that serves professionals in the resort industry. If you wish to remain current with industry news, people, trends, and the movement in the industry, please go to ResortTrades.com to read the headlines and to subscribe.

We’ve asked Matt Stauffer, vice president of Gregory and Appel Insurance, to share some advice with resort operators. So, welcome Matt.

MATT: Thank you and thank you for that introduction. And thank you for everything you do. I’ve mentioned once before that I’ve watched a lot of your videos and that’s helped me grow tremendously as a professional. So keep up the excellent work! It’s a true honor to be part of this today.

SHARON: it’s a pleasure to have you! I think this isv ery timely information. So before we actually get into the meat of what you’re going to share I saw that you were very committed to helping your resort clients. What makes you so passionate about what you do?

MATT: That is something I could talk to at great length. Honestly, I’ve seen first-hand how much they contribute to creating great memories for families. For myself it was Myrtle Beach in the ‘80s. It was Keystone, Colorado, in the 90s and just creating family memories. My wife and I have a goal to get our three kids to all 50 States before they graduate college.

My goal as an insurance consultant is simply to ensure that businesses behind these experiences are protected and thriving. It’s a tough task in today’s environment, whether it’s navigating coverage needs, avoiding last minute surprises, or even tackling rising costs.

I’m driven and our team is driven to really challenge the insurance marketplace and elevate how these industries are represented. One of the beautiful things about this hospitality space is that it literally welcomes guests as an occupation. It’s about collaboration and really working together and rolling up our sleeves to try to even further improve this industry. I just love what I’m seeing from homeowner associations out there.

SHARON: What are some of the biggest challenges resort associations and timeshare owners are facing in the current commercial property insurance market?
MATT: It’s a constantly evolving environment; the insurance landscape is constantly changing. So there’s a lot to keep tabs on.

Rising premiums is something we’ve all personally felt with our personal home and auto insurance. But in the resort space this is one of the biggest challenges. A lot of it’s driven from more frequent severe weather events. A lot of insurance companies are simply reducing their capacity or withdrawing from markets all together, especially those that have higher exposure to natural disasters. So that means fewer options for resort owners looking to get comprehensive coverage and it makes it more difficult to find policies that cover all of their needs.

A lot of carriers are introducing higher deductibles and I think this is something that doesn’t get enough attention. If you’re in a hurricane prone area and they give you a 5% name-storm deductible and you’ve get a $12 million bill; well that’s a $600,000 deductible! So you need to make sure you have proper reserves. There are just a lot of conversations I don’t think are happening quite enough, so I’m glad to have an opportunity today.

With rising costs a lot of people are trying to cut corners and lower coverage to get lower premiums. There are ways to trim cost but you don’t want to see glaring red flags or gaps in there that can expose you even further. Just navigating these challenges all together requires not just a good insurance policy, but a full comprehensive risk management approach. So you want to have coverage solutions top-to-bottom. You want to have a team that’s prepared and proactive when it comes to the claims management side of things and also someone that has deep relationships with the carrier so we can actually cast a wide net have market depth.

SHARON: Particularly, of course, in Florida where so many timeshare resorts are based.

MATT: That’s a great point. Of the 1500 or so timeshare properties in the United States I think 360 or so are based in Florida . A lot of these in coastal areas are where people want to go!

SHARON: You’ve mentioned that your firm Gregory & Appel Insurance has developed some proactive strategies for risk management. I’d be very interested to hear if you have any examples of how your team’s helping resorts mitigate risks related to the catastrophic weather events that we’ve seen of late.

MATT: We pride ourselves on is that full, all-encompassing risk management like property fortification and risk assessment . We walk properties for these very reasons. We can learn a lot about a resort property by examining their insurance policy but until we step foot on the property and we get to know the personnel and maybe even attend board meetings…. It really takes that to peel the curtain back and really get a true understanding

It means the world to underwriters when they’re giving push-back on building updates. Or discussing when the roof was last replaced . When I’m showing them pictures that I took personally, the underwriter’s tone changes. They understand that we do know the property and we’re not just trying to get the lowest price possible. We’re actually thinking strategically on what improvements have they done and how can we benefit that in the marketplace.

It even expands further with emergency planning. We work closely with our resort partners to to develop disaster preparedness protocols for evacuation communication recovery. Anything we can do to minimize operational downtime during extreme weather events is going to be beneficial to our clients.

SHARON: Matt, you mentioned creative coverage options like parametric insurance and captives. That sounds like Greek to me. Please explain.

MATT: The insurance industry is becoming more innovative than in years past. A lot of carriers, as they tighten up their underwriting restrictions, they’re carving out or outright excluding certain coverages. So with parametric insurance it’ll actually pay out on a specific event . So maybe it’s a wind speed or rainfall amount rather than waiting on a traditional claim process. This provides resorts and timeshares with faster, predetermined payouts after these weather events, which helps speed up the recovery.

For example as it relates to things like wildfire, we can actually set a parametric to include coverage. We can actually define the terms around that; take that away from the carrier and actually to put that into our control.

You also have captive insurance which is gaining more and more momentum. It allows groups to create their own insurance company, essentially, to cover specific risk and possibly reduce premiums. Without question it does help give you better control and really establishes more best practices amongst similar like-minded companies.

SHARON: That sounds really ideal particularly for larger companies. So, how do you educate your clients about what choices they may have?

MATT: Clients make the best decisions when they are well informed and educated. So we want to prioritize keeping them informed especially as it relates to market trends. Because if you have no idea premiums going up and all of a sudden, a few weeks before your renewal, you see that your property premiums have increased 40 percent, that’s not going to sit well with anyone, especially when we’re involving boards and multiple parties. So, we encourage clients to review our eNewsletters and industry reports and we participate in personalized check-ins. We want to provide insights on factors that are going to impact your insurance spend.

We also offer educational sessions where we’re able to dive into more specific topics like climate risk policy and innovation so clients and board members can confidently make informed adjustments to their coverage strategies.

The whole insurance procurement process looks different today than it did in years past In the years to come I think it’s only going to continue to get tighter and tighter so we need to all be involved; we need to be on the same page.

Right now one of the most critical pieces is to get leverage and control back in your hands because for far too long it’s really been dictated by an underwriter sitting behind a desk who’s never stepped foot on your property. So we’re really trying to work together and roll up our sleeves and really change that conversation.

SHARON: Right! What about smaller, legacy resorts? Do you have many clients that are in that category or are you receptive to maybe attending board meetings?

MATT: That’s a piece of the puzzle. You’re right. And aging infrastructure across the country is a concern. We’ve seen a lot of laws and regulations introduced and Florida is really Ground Zero. A lot of states are replicating and following suit. Florida established some things this year and I’ve seen seven or eight other states working on very similar things.

Everybody handles it differently, especially with property management companies. But you need to have a relationship with some kind of insurance professional because it is a very complex area. If you look for the largest budgetary spends, insurance is going to rank right up there. We want to be involved and can kind of shield that conversation, as well.

We can work with our carrier partners and say, listen, if they’re going to spend X to get this done, what are we looking at from a premium standpoint? Is it going to yield a 10 percent premium saving? It may, you know. So we want to explore those conversations and it’s hard to do if we’re kept in the dark. We want to be viewed as an extension of their team and I think that’s going to really be the ticket to getting the best results.

We can suggest strategies to reduce premiums and operational expenses in many cases. For example, wind mitigation studies or property surveys can lead to better underwriting terms cutting insurance cost and interim boosting bottom line so we can get some additional wins outside of just lowering premiums, so it really is a well-rounded.

Litigation trends and legal costs are spiraling out of control especially when you get to third party financing. Plus, it’s just a changing risk landscape in the world of cyber security. When it comes to cyber threats, it is really the Wild, Wild, West. We need to pay attention to aging infrastructure, as well.

Natural disasters have cost at least a billion dollars worth of damage in 2024. From where we sit today, there have been 24 separate events. There’ve been eleven severe weather events including thunderstorms, hail, and strong winds; five tornadoes and three winter storms. We’ve had four hurricanes, including the two recent ones with Helene and Milton and then one wildfire.

To put this in perspective: in 2000 to 2009 there were a total of 67 events that caused about $62 billion in damage. if you look from 2010 to 2019, that number jumped to $131 billion. That’s a 290 percent increase that resulted in an economic impact of about a hundred billion dollars. Then if you fast forward to the last five years there have been 102 events with damages in excess of $120 billion. So it’s undeniable at this point that the combination of more severe and frequent catastrophic events coupled with rising construction cost and it’s not doing us any favors. So we really do have to look at this differently and hone in on geographical locations.

[In the interest of space, we’ve had to cut ]

MATT: I would wrap up by saying I know it might not be the most exciting thing to think about; insurance will rarely rank high on your morning to-do list. But it is very important that you have these conversations. It’s a lot deeper than just looking at your insurance program. It’s about risk management; it’s about being proactive and that’s something we can really help with. So whether it’s with us or your current insurance professionals, I’d advise you to push back, ask questions, have conversations. I’ll tell you right now, good things will come from it.

For more information on how Gregory & Appel Insurance can assist resort and timeshare owners, please contact Matt Stauffer at mstauffer@gregoryappel.com.

Resort Trades Learning Center is sponsored by Resort Trades magazine, the timeshare industry professional’s only monthly print and digital periodical, The Learning Center has been conducting online interviews with industry professionals since May 2020. Visit YouTube.com/Resort Trades to view previous videos. Subscribe to the weekly eMagazine at ResortTrades.com.