Archive for Current Condominium Issues

Pets not welcome in condo

If you live in a condo, and you are considering getting a pet, then you are up against it on two fronts.

 

One, your condo has rules. Most condo’s are not pet friendly, or at the least they are tolerated.

Then if you get your pet accepted, then you may be blackballed from the insurance company.

condo pets

 

 

 

 

 

 

 

 

 

 

No need for statistics here, all you have to know is that the most liability claims every year under homeowners insurance are under the dog category.

Good luck with your pet in your condo, but if you are just thinking of getting a dog, before you fall in love with that cute puppy, here is a list of dogs, that insurers do not consider cute.

  • Pit Bull Terriers
  • Staffordshire Terriers
  • Rottweilers
  • German Shepherds
  • Presa Canarios
  • Chows Chows
  • Doberman Pinschers
  • Akitas
  • Wolf-hybrids
  • Mastiffs
  • Cane Corsos
  • Great Danes
  • Alaskan Malamutes
  • Siberian Huskies

 

I have a dog in my condo, a cairn terrier. Consider one of those before you go getting a bull mastiff or a Doberman.

I believe there is a direct correlation between someone’s age and the size of their dog. The younger you are the bigger the dog, and the older you are, the smaller your dog is.

” with age comes wisdom”

 

How do I find out if my condominium is in a flood zone?

If you are looking for a quick look to see what flood zone and your chances of flooding are, go to this free website.

 

FREE FLOOD

 

Everybody is in a flood zone and most anybody should be able to get flood insurance and almost everybody should get flood insurance.

If you see that you are in a 1% chance of being flooded zone, the inclination is to take the chance. It may sound like a good bet, but it isn’t

Check with your agent and the NFIP for more information

Condo property manager

How does your condo property manager affect your insurance?

  1. They make the decisions for you
  2. They may know more than you
  3. They deal with vetted agents and companies
  4. they require you to buy coverage for them through your policy, like being named as an additional insured on the liability policy, the fidelity policy and the directors and officers policy.
  5. They choose the contractors, remediation teams and maybe the public adjuster after the loss.

 

You put a lot of faith and a lot of money into your property manager, so choose wisely.

Top selling condo’s in Boston 2013

The top selling condo’s in Boston include some of the most posh addresses. Many that you would expect.

But When it comes to insurance, do you get what you paid for?

First the list, Ten sales but only half as many buildings.

  1.    The heritage        7.1 Million
  2.    The mandarin      7.0 Million
  3.    Clarendon            6.5 million
  4.    3 Commonwealth 6.5 Million
  5.    The mandarin      6.3 million
  6.    50 beacon Street 6.25 Million
  7.    Clarendon           6.225 Million
  8.    Clarendon           5.9 Million
  9.    Clarendon           5.7 Million
  10.  3 Commonwealth 5.75 Million

So what is the point! I guess it is that people have a lot more money than me. But the real point is that after spending all this money, it would amaze you that this huge investment is not insured properly.

In most cases, if you add up the sales prices of the building and compare that to the insurance policy insured value, it has little or no relationship.

For all you smarty pants, I know that you do not insure for the sale value, but for the actual replacement value. That being said, my guess is that each one of these buildings may be underinsured.

If you paid 7,000,000 for a property and saw that you had $3,000,000 in coverage, I would think that this would be cause for a raised eyebrow and some questions.

Protect your assets, and let me know when the housewarming party is.

 

 

 

 

 

 

Condominium Amenities How they affect your insurance

It is our nature to want stuff. It is natural to want what the other guy has.

So we go out and get it without much thought. We just want it! Just because.

Look in my kitchen to see what I mean. At some point I had an epiphany that came to me and said that I have to have a bread machine, a make your own soda machine, a frydaddy, and a waffle maker. Don’t even get me started on home fitness stuff that my wife had an epiphany about including the thigh buster and the butt cracker.

condo amenitie My point is that as an association we also want things, like a pool, like a playground, like a clubhouse and a guard shack.

We think about the cost, we think about the usage ( always divide that by two or more) But do we ever think about the insurance.

The answer is no.

Let’s look at pools and playgrounds:

  1.  Liability, liability and more liability. Pools should come with a lawyer along with the directions and water.
  2. property insurance- Did anyone think to cover the property? probably not.
  3. Directors and Officers- What happens when the second guesser says ” why did we do this and who made this BAD decision”  Oops!
  4. Likeability- What happens when your insurance company who used to like you, doesn’t like you any more? And if they like you still, you will pay for it for sure.

condo playground The point is that you want it, you have to have it, and you more than likely will get it ( Think thigh master). But, before you do, think about what you will need for insurance, and how it will affect the association.

As always good luck and be smart.

 

Who does the FHA think they are?

I wish I had a dime for everyone that has said this over the years?

Insurance frustration

The FHA is driving me crazy

The FHA and Fannie mae can control your lives.They tell you what to do and they expect complete compliance without exception.

So What is FHA looking for when it comes to insurance?
In reality, nothing more than what you should have and what is prudent. The only problems arise, when they try to interpret what you have given them. Their terms and nomenclature seem to differ from the insurance industry.

Here is what they require:

  1.  Hazard insurance this is your basic property insurance for fire and other perils. They require 100% replacement cost ( this is one of those terms where the problems start )
  2. Liability insurance standard stuff that we all have with a $1,000,000 limit ( they don’t understand the aggregate part however)
  3. Fidelity (dishonesty insurance). They are selective here. They only require you to have it for associations with over 20 units. Sometimes they make you add the property manager as an additional insured. They want you to have a limit of 3 months fees and enough to cover the reserves. ( You can see that this floating number can be an issue)
  4. Flood- If the FHA thinks they can figure out flood insurance, I might hire them, because the other government entity that is more beaurocratic than the FHA if the NFIP. More letters means more confusion. You need it, up to the replacement cost, but the NFIP won’t sell it to you in all cases. They also won’t let you buy it on your own, the association needs to buy it. So, like in my condo, the other owners ( no mortgages ) don’t want it, or they don’t need it ( above grade floor) you have no choice but to go on your own for it.

These are the basic requirements, and they are fair, and you probably already have the coverage, but just wait till they have to approve it. If it is not in their language, WATCH OUT!

It is the FHA’s game and you have to play by their rules, or you do not get approval. More than 30% of all condo loans are FHA backed and approved.

 

when is replacement cost not replacement cost? Condo insurance

You have a master policy with replacement cost. Good! You should.

When is replacement cost not replacement cost?

Just because you have a box checked off, does not mean that every loss is adjusted the same way. Like everything, look at the fine print in your policy.

Examples of when RC is now ACV ( actual cash value) in some policies:

  1. You have functional replacement cost
  2. your roof is old and out of it’s useful life
  3. carpeting
  4. property damage to others
  5. You don’t actually replace the item or property
  6. Your property is irreplaceable

These are just some of the examples you will find where replacement cost is not really replacement cost.

 

read your policy, or ask your insurance pro.

 

Be proactive with your condominium insurance

Did you ever hear the saying

Don’t wait till you are thirsty to dig a well

The same advice can be given to the condominium association that waits till their  policy come in the mail and it is 25% higher than last year, and the renewal date has already gone by.

Another reason not to wait is the association that renews and pays and pays and pays. All of a sudden there is a string of bad luck, and you have a few minor claims. The bad mews comes down that you are no longer being considered for your renewal. Now you don’t look so good.

Be proactive. Get a proposal every couple of years. Do not wait till you are desperate to take a look.

If everything is equal amongst the insurers and the agents, then stick with what you have. Like in baseball, tie gores to the runner.

 

Good Luck!

2 unit condominium insurance

2 unit condo’s are a different breed.

Have you heard the saying?

” The only thing worse than a three unit condo, is a two unit condo”

condexI own one, so I am living this quote. You are at the mercy of who your neighbor is. This can be a great thing, or a nightmare.

What are the insurance issues?

Condo association insurance is basically the same for a 100 unit building or a 2 unit building. The issues come from your buying power and the appetite of the insurers.

Insurers:

Insurers often times do not pursue these condo’s, because quite frankly there is not enough money in it. Also, they think that they are nothing more than a two family owned by two people. They have limited common area, with more area designated as exclusive use. many of the big insurers will limit their appetite to buildings with 10 or more units. Two unit condos are akin to the ugly stepchild.

Buying power.:

Important condominium coverages like water back up, D&O, hired and non owned auto, loss of maintenance fees and many more can be expensive to buy for a small association. many times these costs are single fee based and the same price is charged for small or large associations. many times the small unit goes uncovered due to high pricing of coverage options.

Pricing tends to be higher and the costs are only divided by two parties. For example a $6,000 policy adds $500 a month to your condo fee before any other charges. This might make it harder to sell.

You might have to work harder to find the right coverage at the right price, but try not to skimp on coverage and take care of your condo. Claims will only make your search more difficult.

 

 

Geographic insurance issues for your condo

I was just on a discussion board on linked-in for the CAI group, and people were talking about insurance issues.

What struck me is that whether you are a red state, or a blue state, or whether you are east coast or west coast, you have unique insurance issues.

people in Florida, do not worry about frozen pipes, but they sure are concerned about wind.

A condominium in Iowa does not even consider getting terror insurance, but someone in New York and Boston does.

The only thing I can tell you is that if you are concerned about it, you probably have a REAL exposure, and the company that insures you cares too. They care enough to charge you more, exclude the coverage, or are not willing to write the coverage.

How frustrating is that?

Be prepared to ask your insurance person for the coverage that you need, and if they do not deliver, ask the next person. If it is expensive, or the company is unwilling to cover the exposure, there is a good chance you need it.