Archive for condo king

Getting a insurance quote for your condominium

You are sitting around at your latest condo board meeting. You are reviewing the budget and your meager finances.

Looks like you might have to increase monthly fees again. Everyone groans!!  sighs!! and mumbles under their breath.

“Hold the phone” someone says. Before we tax the owners again, let’s look at our expenses.

Running a condo is running a business.

You look at one of your biggest expenses and there is the elephant in the room. Insurance is big. Necessary, but big.

There are 100′s of articles talking about condominium insurance and 100′s of agents and companies that want your business. So how do you go about asking for a quote?


  1. Do go to an expert in condominium insurance
  2. Do put someone in charge that knows insurance
  3. Do an evaluation of needs before getting quotes
  4. Do due dilligence


  1. Don’t rely solely on your property manager
  2. Don’t rely just on your current agent
  3. Don’t ask for an apples to apples quote
  4. Don’t always take the cheapest price
  5. Don’t take away coverage w/o a lot of thought
  6. Don’t be afraid to fire a broker for not doing their job


There are many things to consider when shopping for insurance. remember that you are probably not an expert, and you rely on others expertise. The problem is that the agent is probably not an expert, the property manager is probably not a licensed insurance agent or counselor, and don’t forget that people are people and they look out for their best interest. Agents might go with the company with the highest commission, or the property manager might only use his/her buddy.

It is your money and your business, and your exposures at risk. Treat it with care and caution and do the best for YOU and YOUR association.

hurricane guide book for condominiums

Are you ready when the wind blows?

Probably not.

Be prepared.

click here: Hurricane Guide Book   for a great reference on how to prepare for a hurricane from the law firm of Katzman,Garfunkel & Berger.



What scares insurance companies about your condo?

Or should I say W.A.T.






Of all the things that scare an insurance company, these three things scare them the most.

Water- water damage is the number one cause of claims

  • ice dams
  • water leaks
  • back up of water
  • burst water tanks
  • burst washing machine hoses
  • flood
  • amd more

Wind- a gust of wind can cause lots of damage

  • hurricane
  • tropical storms
  • tornado’s
  • gusts

all of these events can be damaging and catastrophic

Attorney’s- no one wants to be sued, but condominiums are sued every day.

  • trip & falls
  • unit owners sue each other
  • people sue the board
  • property damage

If attorneys do not have a case, they make a case or as it seems sometimes, they make the stuff up.

Risk scares Insurance companies. If you manage these three risks, you look much better to the insurer.

Flood insurance impacts sale of condo

The new changes in the flood laws can impact the pricing of flood insurance and the sale of your condo, depending on where you are.

From an article by Chris Heidrick:

Last July, Congress passed the Biggert-Waters Flood Insurance Reform Act of 2012 (BW12), which provided for a sorely needed five-year re-authorization of the National Flood Insurance Program (NFIP).

However, FEMA just recently has started to release details of other provisions of the act that will have significant financial impacts on local homeowners, commercial property owners and condominium associations.

Sanibel based Heidrick & Co. Insurance and Risk Management Services ( was one of just 40 agencies throughout the United States in attendance with FEMA officials at the National Flood Insurance Conference in Anaheim, Calif., last week where details were released and clarified.

The most significant section of the act immediately eliminates rate subsidies on structures built prior to 1979 on Sanibel and 1984 on Captiva, Fort Myers Beach and many parts of mainland Lee County. Rates for these structures have been artificially low since the inception of the NFIP in 1968. Premiums for these policies will increase from a range of $1,200 to $2,400 to at least $3,000 and in many cases to well over $10,000 per year. While the new rates have not yet been released, indications are available. Government and industry leaders all agree on the enormity of the increases.

Residential, Commercial and Condominium Association policies that were in effect prior to the act (July 6, 2012) will have the increases phased in over the next several years through annual increases of 20 to 25 percent per year. However, policies that were purchased on or after July 6, 2012 will require owners to obtain an Elevation Certificate and will be re-rated at the new, higher rate at the first renewal after Oct.1, 2013. Buyers of older, ground-level homes/buildings should have an Elevation Certificate done by a surveyor now and ask their agent how their premiums may be impacted at the next renewal. Some people may struggle to pay premiums that increase as much as 500 percent at their next renewal. Owners of all structures located in a Special Flood Hazard Area and having a mortgage are required to maintain flood insurance.

Selling impacted properties may also become more difficult as buyers who require a mortgage may be reluctant to purchase a property that requires a $10,000 per year flood insurance policy. In some cases the only way to escape the impact of BW12 may be to elevate the building.

And, as if these increases are not painful enough, there are several other provisions in the law that will further increase flood premiums today and in the future.

Any building that has been “substantially improved greater than 30 percent of its fair market value” will immediately be subject to the new, higher rates. This threshold is lower than the “50 percent of fair market value” threshold that triggers conformance requirements under FEMA construction guidelines. However, if the improvement elevates the building above Base Flood Elevation it could result in a decrease in flood insurance premiums.

Building and Community Officials should be advising citizens that there are significant credits provided for exceeding FEMA requirements. Often buildings are constructed to meet FEMA requirements, which are a minimum standard. Exceeding those standards by elevating just one additional foot could decrease flood premiums over 50 percent.

Further, the practice of “grandfathering” will be phased out beginning in late 2014. Grandfathering allows a property owner to continue to pay lower rates after a revision to flood maps indicate an increased hazard for that property, saving some property owners thousands of dollars.

For owners of properties impacted by BW12 there is one glimmer of hope that has recently surfaced. On May 7, 2013, Sen. Mary Landreiu of Louisiana introduced an Amendment to the Water Resources Development Act (WRDA) that would stop premium rate increases for NFIP coverage until FEMA conducts an affordability study and there is adequate time to act on the findings. Homeowners and citizens should contact Sen. Bill Nelson and Sen. Marco Rubio to express their concerns about Biggert-Waters and ask for support of Sen. Landreiu’s Amendment to the Water Resources Development Act.

neighborhood association insurance needs

I live in a condo and we have our own insurance needs.

But what do you need for insurance if you have a neighborhood association?

There are 1000′s of neighborhood associations around the country. These associations bind a community together and create guidelines for living and a place for community involvement.

What are the risks?

  1. people
  2. property
  3. liability

Take for example a urban neighborhood association that forms to bond a 10 block radius of people that own their own homes or units. They band together for a common bond and sense of community.

What do they need for insurance? Let’s assume that they are a serious and real association, with rules, guidelines, officers, meetings and events.

Insurance needs are:

  1. Directors & Officers liability- protecting the board against improper decisions, or claims against them
  2. property insurance- do you have an office, own real property? Then it needs to be protected against fire and theft
  3. liability- Let’s face it, people injure themselves and sue, and you create property damage and people sue you.
  4. Special events- wine tasting parties, block parties, charity functions,dances, and the pancake breakfast. Whether you rent a jumpy trampoline for the kids or not, these events all create a unique liability issue and need to be insured.
  5. Workers compensation- Do you hire anyone? Do you hire a landscaper to mow common area, or do you hire security people. If you hire people, you need workers compensation.


how do condominiums affect the economy?

Cold hard facts:

  • In 2012, association boards supervised the collection of close to $40 billion in annual assessments and maintained investment accounts of more than $35 billion for the long-term maintenance and replacement of commonly held property.

Condominiums matter and pump billions into the economy every year in sales, maintenance and fees.

I have no idea how much money is spent on condominium insurance. But let’s make a guess. I guess that $1000 is spent for insurance on average by every unit owner. This is based on their own personal insurance, and the proportionate share of the master policy.

With 1.25 million units, that is over 1 Billion dollars.

Just a guess, but that is a bunch of zero’s.

Condo unit owners matter.

Should I get a home sprinkler system for my condo

Home sprinklers save lives.  fact

What is the cost benifit?

5 myths about home sprinklers.




1. When one sprinkler goes off, all the sprinklers activate.

The sprinkler heads react to temperatures in each room individually, allowing only the sprinkler closest to the fire to activate. In fact, 90 percent of fires are contained by the operation of just one sprinkler.

2. A sprinkler could accidentally go off, causing severe water damage to a home.

Records show that the likelihood of this occurring is very remote. In addition, residential fire sprinklers are designed and tested to minimize such accidents.

3. Water damage from a sprinkler system will be more extensive than fire damage.

The sprinkler system will limit a fire’s growth. Therefore, damage from a residential sprinkler system will be much less severe than the smoke and fire damage if the fire had continued unabated, or the water damage caused by firefighting hose lines.

4. Home sprinkler systems are expensive.

The cost of installing home fire sprinklers averages $1.61 per square foot for new construction, according to the Home Fire Sprinkler Cost Assessment report produced by the Fire Protection Research Foundation. To put the cost of a sprinkler system into perspective, that is roughly the same amount people pay for carpet upgrades, a paver stone driveway or a whirlpool bath – none of which save lives.

5. Requiring residential fire sprinklers will inhibit new home construction.

A 2009 study conducted on behalf of the National Fire Protection Association (NFPA) compared residential home construction in four counties in Maryland and Virginia – two with sprinkler mandates and two without. The study concluded the presence of sprinkler mandates did not have a negative effect on the number of homes being built.


* info from the Claims Journal

Exclusive rights use for your condominium

What is exclusive rights use in a condominium? How does it work?

In a condominium, there is shared use. There are common areas and common amenities and shared expenses.


But you have under the deed and by-laws in many cases the exclusive use of some areas. These areas can be:

  • Your unit
  • your driveway
  • your parking spot
  • your yard
  • your deck or roofdeck
  • your balcony

No one has the right to infringe on the exclusive use of your area. People are funny and territorial. They slowly take over your land and your space if you let them. They use your space if you are not using it.

Set your neighbors straight. Tell them that while we are in a shared community, there are places that they cannot go. It is trespass, and it is illegal.

There may be some instances where someone can have access rights to walk through, or dig for utilities etc, but your exclusive use is yours to use within the guidelines set forth in the condominium documents.


What is forced placed insurance coverage.

If your mortgage company requires you to have insurance and you refuse, or let your policy lapse, then they will force insurance on you. They will pay for the coverage and bill you back.

This is called mortgage impairment coverage. It is basic, and it is expensive. You have no choice over what is covered, and it generally only covers the interest of the mortgagee.

Can you trust them?   Well, not always.

Check this out:

Wells Fargo and QBE Insurance company agree on a 19.3 million dollar settlement. Many of these are condo owners.

entire article from insurance 360

Wells Fargo and QBE have agreed to settle a lawsuit dealing with force-placed insurance policies in Florida involving 24,000 borrowers.

The companies will pay $19.3 million to compensate the borrowers.

The settlement in federal district court in Miami deals with claims that the bank and QBE overcharged homeowners in Florida for force-placed insurance. The class-action lawsuit is one of three filed in connection with alleged overcharging of homeowners for force-placed insurance, which became a huge business in the wake of the housing bust.

The two others were filed in New York, according to industry officials. Best estimates are that the business has $2.6 billion in annual written premiums.

Can I be forced to buy condo insurance?

Can you be forced to buy condo insurance? Yes and NO.

If your condo documents insist, and you sign on, then you must. If you have a mortgage and one of those 500 pieces of paper that you never read but signed at the closing says so then Yes.

But if you have no mortgage and no documents to say that you have to, then you can make your own decision. If you choose not to, it is a BAD decision, but one that you can make.