Flickr photo credit: everdred
[technorati tag afeuck6w4j] With hurricane season in full swing and hurricanes now kicking up throughout the Atlantic, condo associations might want to review and update emergency plans before facing a possible evacuation or shelter situation. If your property is located within a hurricane, tornado, or flood zone, it would be wise to review and reiterate to their residents what emergency plans are in place and what residents can expect during an emergency.
Prepare a list of actions for your residents to take in the event of an emergency. Some of the necessary information includes:
- Updated residency status/contact information throughout the year. For instance, if your residents typically travel for work, encourage them to let someone in the office know of their whereabouts in case of an emergency. Read more…
Flickr photo credit: MBK (Marjie)
Standard Property insurance forms, unless properly endorsed, specifically exclude monetary losses that arise from the enforcement of building ordinances, building codes, or similar laws.
You may have carefully set a 100% Replacement Cost limit on your policy that is adequate to cover inflationary increases, but that “replacement” is to replace your building with “like kind and quality” of design and materials. Upon applying for a building permit to start repairs after a loss, you may be advised you’ll have to:
A. Tear down the undamaged portion of your building; and/or
B. Pay for the cost of that demolition to the undamaged portion; and/or
C. Replace the damaged portion (and the torn-down undamaged portion, if applicable) with construction that meets current codes, including (perhaps) such things as sprinkler and alarm systems, ADA-compliant entryways and facilities, earthquake- or windstorm-resistant construction features, etc.
None of the additional costs of such items are covered by standard, non-endorsed Property insurance forms – regardless of the Replacement Cost limit of insurance you purchased.
Insurance coverage for these items is available (for example, the Insurance Services Office, or “ISO” form that provides coverage is CP 04 05 “Ordinance or Law Coverage”). That form covers the above listed items, and a limit can be selected for each one, Coverage A, Coverage B, and Coverage C (sometimes coverages B and C share the same limit). Read more…
photo credit: flickr snapman
These days, most insurance against direct risks of property loss is arranged on a Replacement Cost (or “RC”) basis. The main alternative that is sometimes used is to insure property on an Actual Cash Value (or “ACV”) basis, which is defined as “Replacement Cost (at the time of loss) less Accumulated Physical Depreciation”. ACV insurance may sometimes be the only alternative available, but it should be avoided if at all possible, and understood fully if adopted.
Total losses can, and frequently do, happen. Even a relatively small fire can involve so much smoke damage, and water damage from fire suppression that the cost to make everything right equals the cost to replace the entire building and its contents. A big wind and rain storm can take off a roof, blow out windows, and soak everything so badly that a total loss occurs. One of the basic rules of risk management is “Don’t risk a lot for a little”. If your insurance program is properly designed, you can insure to 100% of your property’s RC at little or no increase in cost over skimping on Property insurance limits. Read more…
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