The camp insurance market has shifted drastically over the past five years, with especially sharp changes in the last 1-2 years. This has led to camps all across the country, being faced with premiums multiplying and coverage pullbacks. There are a few reasons for this:
- Lack of Competition. Five years ago, there were two or three more insurers willing to provide adequate coverage at a competitive rate for camps across the US. Currently, there are perhaps three or four carriers total who are even considering offering quotes on camps.
- Property Issues & Claims. Camp property is traditionally frame construction and in high protection class areas (areas that are difficult for fire departments to access). Most insurance company modeling identifies this combination as extremely undesirable. This results in higher rates and worse terms/conditions on policies.
- Liability Exposures & Pricing. Traditionally, liability insurance costs for camps has been less than $10,000 for your average sized camp. Given that the operations of camps often have ropes courses, zip lines, shooting ranges, etc., the average liability claim was four to five times the annual premium paid. With social inflation continually pushing up the average claim payout as a result of bodily injury, this number is growing much faster than insurance premiums have.
Summary: In recent years, insurers in the camp space have lost millions on property and liability claims. As a result, most have either exited the market or raised premiums significantly while reducing coverage. Our experience is that there are camps all across the country that do not purchase property coverage because it is either (1) unavailable, or (2) not affordable. Some camps are buying liability-only policies that exclude a number of their primary exposures such as water activities, zip lines, and climbing apparatuses. Unfortunately, even though your renewal offer might have a significant premium increase and lower limits, there is a good chance it still might be your best option.
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Thanks to Jeff for sharing this overview of our current insurance landscape. It's a tough moment for camps, but there's some comfort in understanding the wider perspective.
