Navigating Risk in Real Estate & Insurance: A Deep Dive Into Casualty Trends, Client Challenges, and Expert Insights
Table of Contents
Introduction
In a recent episode of the Bricks and Risk podcast, we welcomed a seasoned insurance executive, Sean Kent, with deep expertise in casualty markets, HOA risk, and client education. This wide-ranging conversation tackled some of the industry’s most pressing topics—from the implications of social inflation to the future of specialty coverage for high-risk amenities like diving boards and bounce houses.
If you’re in real estate, risk management, or insurance sales, this conversation is packed with critical insights that affect how you operate in today’s hardening market. We'll also touch on the gains that the industry has made with technology in the last few years and how that equips everyone with more tools to better underwrite all P&C risks.
1. The Impact of Social Inflation on Casualty Insurance
What Is Social Inflation?
"Social inflation" is more than a buzzword—it's an economic trend shaking the foundation of the casualty insurance market. Defined by rising litigation costs, increased legal advertising, and larger jury awards (also known as nuclear verdicts—verdicts that exceed $10 million), this trend is placing immense pressure on carriers. Not only the immediate markets but, also the reinsurance markets that have to price these types of catastrophic claims into their models as well.
Why It Matters for Clients
Even though casualty and liability coverages might not be the highest line item in an insurance renewal, they are seeing consistent rate increases. Clients in commercial real estate, property management, and high-net-worth personal lines are noticing the pinch.
“This isn’t going away anytime soon,” our guest emphasized. “Social inflation is pushing underwriters to pull back, particularly in litigious states like New York where labor laws make even smaller claims balloon in cost.”
2. The Umbrella Market and Coverage Challenges for HOAs
The conversation turned toward one of the most impacted areas: the umbrella insurance market for HOAs and condo associations.
Why Condos and HOAs Are High Risk
HOAs often sponsor events, manage common areas, and carry responsibility for large public amenities. This includes swimming pools, water slides, and community centers—all of which increase the risk profile. In states like Texas and Missouri, where such amenities are popular, carriers are limiting appetite or exiting the market altogether.
Notable insight: Only a couple of carriers nationwide will still insure properties with diving boards or water slides.
The Real Impact
When a carrier refuses to renew due to high-risk amenities or previous losses, board members are forced to make tough decisions like:
Removing recreational amenities
Accepting much higher premiums
Self-insuring certain risks (a financial gamble)
For boards, these insurance decisions are rarely popular, but they’re critical for legal and financial protection.
3. Special Event Insurance: Real Stories and Risks
One of the most engaging parts of the interview was a series of real-world stories that illustrate the importance of special event coverage.
Bounce Houses, Street Closures, and Risk Transfer
Sean Kent recalled a case where a community blocked off a street and rented a bounce house for a neighborhood fair. Because the homeowner signed the rental agreement, they were liable for any incidents—potentially facing a serious lawsuit without proper coverage.
“If someone breaks an ankle in a bounce house, and no special event policy is in place, the liability can fall squarely on the resident or HOA.”
This is where special event insurance becomes a cost-effective tool to transfer risk. It also underlines the importance of client education, which leads us to the next point.
4. Building National Expertise in Insurance
Why Niche Expertise Matters
Mr. Kent shared how focusing on a narrow niche has given him national leverage. Specializing in a specific market—like HOAs, condos, or real estate—enables brokers to deliver more tailored advice, secure better terms, and move quickly during renewals.
He emphasized the value of understanding what's happening across the country. Whether it's California wildfires or New York labor law reforms, national context gives advisors a clearer picture of what underwriters are thinking.
“I might not be right every time, but I probably know more than the other guy because of that national scope.”
If you’re in the insurance or real estate advisory space, niching down could be your biggest growth lever.
5. Client Education and Industry Trust Struggles
The Strain of Constant Market Increases
Clients are frustrated. Five years of increasing premiums—often with little change in coverage—has led to a general sense of distrust toward carriers and brokers alike. Educating clients on why markets behave this way is more important than ever.
The Real Challenge: Board Turnover
Boards change. Often, by the time you’ve built trust and educated a group of board members, a new set rotates in with different priorities. This turnover creates massive friction when explaining:
Why their premium increased 10%
Why a claim affected their insurability
Why fewer carriers are quoting their policy
“We're not dealing with CFOs—we’re dealing with well-intentioned volunteers who usually have no insurance background,” the guest pointed out.
This puts added emphasis on communication and process, especially during renewals.
6. Bonus: Practical Advice From a Proven Leader
“Just Show Up Every Day”
A simple yet powerful tip offered by our guest came from James Maguire, founder of Philadelphia Insurance Companies, who sold the business for billions and built a reputation for excellence.
The takeaway: consistency wins. Showing up daily in work, relationships, fitness, and goal setting is the key to sustainable success.
Recommended Read: Think and Grow Rich by Napoleon Hill – the foundational mindset book for entrepreneurs.
“You Create Your Own Reality”
This mindset-forward quote was a favorite from the episode. It’s a nod to the law of attraction—focusing on goals, affirming your path, and remaining optimistic even when external conditions (like markets) aren’t in your favor.
Backlinks and Related Resources
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Frequently Asked Questions
What is social inflation and why is it important in insurance?
Social inflation refers to rising costs in insurance due to increased litigation, large jury verdicts, and more aggressive plaintiff behavior. It's driving up casualty insurance costs across all sectors.
Why are HOAs struggling to get umbrella insurance?
Because of their shared liability, community events, and high-risk amenities like pools and water slides, HOAs present complex risks that many insurers are no longer willing to take on.
How can special event insurance protect homeowners and HOAs?
Special event insurance transfers liability for one-time community or private events—covering injuries, property damage, or vendor issues.
What’s the biggest challenge in client education for insurance brokers?
Constant market volatility and board member turnover make it difficult to maintain consistent understanding and trust with clients.
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