Condominium insurance premiums rising

condo premiumsAre prices on the rise for condominiums? When I pick up my regional issue of Condo media, I see a full page ad from a local insurance agent touting that premiums are rising.

Are they right?

They are to some extent. Right now in 2013. Premiums do seem to be on the rise. Insurance premiums are always in some phase of a cycle. The term insurers use is a soft market ( low competitive pricing ) and a Hard market with ( prices rising ).

So, don’t be surprised if you renewal has an increase. Your options are to accept the increase, ask for other quotes, or reevaluate the importance of some of the coverages, or think about raising your deductibles to stabilize any increases.

Why would an insurer raise rates?

  1. Your individual building has had adverse loss experience.
  2. The company itself has had adverse claims experience
  3. Your exposure has changed
  4. The insurers cost of their insurance has gone up. This is called re-Insurance.
  5. Catastrophe losses like Sandy, floods, tornadoes and wildfires has caused industry wide losses that are in excess of what the insurers would have expected.

The reality is that insurance for property and condominiums have been going down for some time now and condominium insurance buyers have benefited from the lower rates and the increased competition for your business.

Ask your agent or your carrier for an explanation of a rate increase, and if shopping the insurance is a good idea. It just might be that the increase is due to added value in your policy, or an increase in limits to keep with building values and liability exposures. If you can lock in a longer term, now might be a good time to have guaranteed rates.

 

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