NEW YORK— Regardless if their insurance renewals were pre- or post-Sept. 11 terrorism, hoteliers have been prepping for a changed paradigm within the coverage industry for some time, already alerted by signs of an economic downturn and expected rate increases. Now, they’re escalating efforts as insurers themselves look to “recover” from the massive pay-outs against claims driven by the attacks. Indeed, Sept. 11 events were termed “the most expensive loss in the history of the insurance industry,” according to the Insurance Information Institute here. The Institute’s vp/chief economist, Robert Hartwig, reported “the shock waves from this event will impact the price and availability of insurance coverage for years to come. Over 100 insurers around the globe are expected to pay an estimated $40 billion or more dollars in the course of settling tens of thousands of claims.” The trickle down is a hard market, a seller’s advantage wherein insurance is expensive and in short supply. “We don’t renew until May 1, so we’re fortunate,” said David Cleveland, senior vp/partner, HighPointe Hotel Corp. “But we’ve already moved into action.” The company, which owns and operates franchise properties in Florida, Louisiana and Massachusetts, normally begins an aggressive renewal process 60 to 90 days out. “But we’re starting now. We’ve got to prepare for the worst,” Cleveland said. He’s been told by retail and wholesale (reinsurers that insure insurers) agents to brace for increases between 35% and 50% across all insurance lines, such as property, worker’s comp, liability. Cleveland expects even harder hits for his portfolio, weighted with Gulf Coast properties. These depend on reinsurers and specialty coverages against weather threats such as hurricanes, flood and wind. “We do blanket coverage of mainstream risks, but have to fill in gaps, particularly for coastal properties, with some specialty policies. Those are the ones we’re really bracing for.” Inflationary Increases To date, Cleveland’s only seen “inflationary increases.” To offset potential financial impact, however, he’s “shopping at least” two retail agents, who in turn will shop the coverage needs among dozens of individual insurance carriers. “By the time you shop it at both those levels, you feel like you’ve pieced together the best program you can. We’ve got layer upon layer of policies, extensions and endorsements.” When insurance administrator Terri Stanganelli renewed insurance for Meyer Jabara Hotels (MJH) last July, she estimated the rate increase was 20%. “Nine-eleven has changed the whole picture of insurance. I’m hearing there’ll be much less capacity, not as many markets to go to to purchase insurance.” She said not only are premiums going up, but coverages are going down. Beyond basics, she’s previously asked for endorsements on specifics, such as sewer back-up, extended business indemnity, wind-driven rain and signage. “Now, instead of throwing those coverages in as they did in the past, carriers are charging a premium.” Stanganelli said while property coverage is “really going up,” she’s not sure all lines of coverage won’t be impacted post-Sept. 11. Among MJH’s coverages are property; workers’ comp (which rose 30% pre-Sept. 11); general liability (plus umbrella coverage); crime; boiler and machinery; host and liquor liability. MJH has added a second broker to shop its package and changed the worker’s comp program after finding a less-expensive policy. However, Stanganelli said the lower rate may apply because MJH is a new client. “When we go to renew that may not be the case.” She said carriers now request more specific underwriting information than in the past. “Things like, ‘What is the tonnage of your largest air conditioner unit? I don’t really know the relevance.” Anticipating even tougher questions, Stanganelli has a 12-page form out to MJH’s 25 properties to complete, drilling down upgrades. “I’m putting together a whole renovation pack