Insurance news and information

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.

How much do you trust the staff you’ve hired to manage the front desk? 

I mean we’ve all heard stories about the waiters and waitresses at our favorite restaurant swiping our credit card numbers on a little theft gizmo before running the charge through for the meal.  I’ve actually been a victim of something similar.  Although I love the restaurant dearly (it serves the best Mexican food) I only pay with cash. period. 

Every month large sums of money moves through your books.  Rents come in as income, and then there are expenses – utilities, maintenance, staff, supplies, insurance, taxes, advertising, legal fees, tenant damage, etc.  Do you have safeguards in place to deter sticky fingers?

Do you have one person write checks and another person sign them?  Who reconciles the bank statement each month?  Direct theft is one form of employee dishonesty. 

Another form would be when an employee uses tenant information – credit card numbers, social security numbers, birthdates, etc. to make fraudulent purchases for personal gain.  This form of theft is more difficult to identify.  And yet, you could be named as a party in the lawsuit. Read more…

One potentially confusing issue in condominium associations is who insures what.  In the past, most condominium association policies would cover whatever the association owned.  Other association policies extended coverage into the units – for example, the sheetrock walls and ceiling, the plumbing, and the electrical within each individual unit.  Association policies would often be written broad enough to cover the floor, kitchen cabinets, appliances, and carpeting.

In recent years, with the rising cost of insurance claims and the ambiguous language in some association CC&R’s, insurance coverage has changed dramatically.  Many condominium documents specifically detail what is to be covered – - for example:  roof repair and replacement only.  In this instance, the documents are explicitly pointing out that all other structure is not covered. Read more…

Welcome to our blog with news and insurance information for the habitational community, with an emphasis towards Apartment managers and Condo Associations.  Whether you are constructing your first complex, or managing an established property, it is our hope to become a valuable resource for you.

If you have questions about builders risk insurance, the unique insurance requirements of Condominium Associations,  or have units in multiple states and need advice, please ask!  We’re here to serve you.