Much has been written about condo and apartment association insurance versus insurance carried by condo / apartment unit owners. The two main types of coverage offered to condo associations are:
1) Bare Walls In – policies covering all real property from the exterior framing inward, excluding fixtures or other installations within the unit.
2) All In – policies covering all fixtures, installations, or additions within the interior surfaces of the individual units.
Obviously the best one for your unit owners would be the All In condo association insurance policy, which would limit the need for owners to purchase additional coverage. Condo associations buying Bare Walls In coverage leave a bit more loss exposure for their unit owners. Most condo associations will advise unit owners on which policy is covering the premises. But what about deductibles? Read more…
Flickr photo credit: turbojoe_(away)
If you’re watching your condo association insurance costs these days, you’ve seen the trend. Insurers are passing on higher and higher deductibles to associations – sometimes to the tune of $10,000. And associations are having difficulty adjusting to the higher costs. In fact, associations facing mounting deductibles are often looking for places to transfer that cost. That means some unit owners are now coughing up extra for the additional deductible amounts in the form of higher association fees.
It stands to reason that associations would choose to pass the additional cost on to the owners. Most associations now include insurance costs in association fees. Because much of the liability stems from owner activity, associations feel justified in including the deductible charges in association fees. But some associations are considering passing that cost on only to those owners who receive the insurance benefits paid for by the premiums. While that’s a more just way of handling the situation, it’s unlikely that a smaller group of owners would be able to take on the deductible. Also, the association may have to go through the expensive legal process of assigning negligence to the owners, which may not be successful. Read more…
Photo courtesy of flickr - Last NYC Hero
Homeowner associations are under constant pressure to keep costs down. With the natural disasters that have occurred in the past year or so, the pressure is growing as insurance costs increase and are easily the largest expense in the budget.
Many Condominium and other community associations have considered self-insurance as an option. Self-insurance can reduce an associations’ premium by 20-40%. As good as that sounds, self-insurance should be fully investigated before jumping in.
What is self-insurance?
In a very loose interpretation, self-insurance is a typical property/casualty policy with an extremely high deductible in which the association is responsible for paying claims less than the deductible. State regulations to self insure Condominium, Cooperatives, Homeowners’, and Timeshare associations vary and must be carefully reviewed for your particular state and circumstance.
Those in favor of self-insurance feel that in their particular case the possiblility of a major catastrophe affecting all members of the plan is so remote and unlikely that the benefits outweigh the risks.
Those against self-insurance think that should a catastrophic event occur they would be financially unable to pay the claims in the instance of full replacement coverage.
If you think self-insurance is something to look into, contact an independent agent with access to multiple markets who specializes in insurance for community associations.
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