How to Verify Tidal Water and Barrier Islands for Builders Risk

Each month, US Assure Director of Product Underwriting Gina Newmans joins us in the studio to address why certain underwriting questions are asked, where common mistakes occur in the policy issuance platform, and offer guidance to help agents submit applications correctly.

Read the Video Transcript:

Water. It often introduces a set of challenges that makes the property insurance industry squirm. When it's nearby, you know it could complicate underwriting. But, how do you ever really know the proximity of water to your client’s property? And, will your client even remember the small creek that runs behind their backyard?

During the builders risk application process, we ask if the structure or project is located within 1,000 feet of tidal water, or located on a barrier island.

Your answer to this question will impact the project’s eligibility for certain coverages, such as wind, and back-up of sewers, drains, or sumps.

After personally underwriting thousands of course of construction risks, I’ve learned you just can’t make assumptions about the location.

So, I’m going to show you a free tool that’ll solve the challenge for you.

But first, let’s establish the definition of a barrier island.

According to Zurich, a barrier island is a landmass separated by water that requires a bridge to access.

When completing our builders risk application for a project on a barrier island, make sure you select “yes” to this question regardless of the proximity to water.

If this question is not answered accurately, it may result in a policy rescission, or Zurich may pursue legal action for misrepresentation of the application submitted.

Now, let’s take a closer look at the rest of that question: “within 1,000 feet of tidal water.” 

What does Zurich consider “tidal water?” A good guideline is any water that rises and falls with the tides, and is fed by an ocean, Gulf or sea coastline.

Your client’s project site may fall within this area if it’s near intercoastal waterways, bays, inlets, rivers, creeks, lakes and other similar bodies of water.

Before you submit the application, make sure to map the location to confirm its proximity.

Google Maps is a great, free tool you can use to measure.

I’m going to map three unique addresses that will demonstrate properties located on a barrier island, within 1,000 feet of tidal water, and both.

Once you have the address ready, follow these steps:

1. Enter the property address into Google Maps.
2. Right-click on the pinned location.
3. Select “Measure distance” from the menu.
4. Drag your mouse from the location’s pin to the edge of the nearest water body.

Let’s map the first property. As you can see, this location is both on a barrier island and within 1,000 feet of tidal water.

OK – let’s move on to map the second property. As you can see, this location is not on a barrier island, but is within 1,000 feet of tidal water.

And lastly, we’ll map the third property. Unlike the one before, this location is on a barrier island, but is not within 1,000 feet of tidal water.

So, if you were submitting an application for any one of these three properties, you would answer “yes” to the application question.

Once you select “yes” to that question, an underwriting hold will trigger because our team needs to determine whether wind coverage can be included. You can also find coastal maps that outline areas ineligible for wind coverage.

If the risk does not qualify for wind coverage with through Zurich, it may still be eligible for builders risk coverage excluding wind. We could also evaluate eligibility for wind coverage through our E&S market.

If the risk is eligible for wind coverage, a quote will be provided.

So, the next time you’re filling out a builders risk application and see that question about tidal water or barrier islands — don’t guess. Use the tools, ask questions and lean on our underwriters to help you get it right.

This is intended as a general description of certain types of insurance and services available to qualified customers. Any description of policy provisions is meant to give a broad overview of coverages and does not revise or amend a policy. Refer to the policy coverage form for a complete representation of the scope of coverage, terms, conditions, exclusions and more. The policy is the contract that specifically and fully describes your coverage. Some products may not be available in all states and may only be offered on a non-admitted basis. Product availability is subject to change.