Archive for Insurance Companies

10 questions to ask when insuring your condominium association

You are no expert. You might know a lot, that is why you got the job to review your associations insurance.

Let’s hope that your agent is and expert and is looking out for your best interest, and not the biggest commission.

Ask these Ten questions:

  1. Is our policy all in all the time? What are the restrictions, and does it dovetail with my bylaws and master deed?
  2. Do I have enough liability insurance? Do I at least have $2,000,000 per occurrence?
  3. Do I have a retro date on my Directors & Officers coverage? Do I have the coverage at all?
  4. Does our policy cover our expenses in handling a claim such as our time, the property managers time and charges by the adjusters we hire on our behalf.
  5. Have we had an increase in premium lately?
  6. Can we lock in our rate for more than a year
  7. What type of replacement cost coverage do we have?
  8. Are we insured to value?
  9. Are our finances covered? loss rents and maintenance fees?
  10. How many different deductibles do we have?

Bonus question:

Are you working with me? How am I getting communication? newsletters, alerts, loss control; and a partner when we have a claim.

There are many more questions to ask your agent or company that you buy insurance from. Try these on for size to start. If you don’t get the right answers, start walking.

How to get an insurance quote for your community association


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.

How to cut your condominium insurance premium?

Cheaper does not mean better.

Penny wise and pound foolish.

If you are aware that cutting coverage and buying the cheapest policy are not always the wisest choices for your condominium association, we can look at ways to trim the fat.

Condominiums are addicted to value and cheap prices. It stems from the fact that budgets are tight, no one wants their fees ti rise, even when services are becoming costlier, and the person making the buying decision has a fiduciary responsibility to do the best thing for the association that they manage.

7 things to look at first when shaving the fat off your premiums:

  1. Are you over insured? check your values
  2. is your deductible too low?
  3. Can you live without flood and earthquake?
  4. is the policy filled with special endorsements?
  5. Are you classified right? Many times a non combustible building has a brick rate, because the agent assumed it was just brick.
  6. Are you getting all the protection credits due you?
  7. Are you paying for coverage for third parties like the property manager.

It is more important to have the right coverage than to have the cheapest policy, but if you must cut the cost, there may be effective ways to handle it. Insure the big loss and assume the smaller ones.

Condominium Flood insurance RCBAP

How do you insure flood for your condominium association?

There are options, but most of them fall back on the government and the NFIP.

If you really want to confuse someone, involve insurance and the government. Both of these entities create more obfuscation than any other industry I can think of.

So how do you navigate the flood issue for your condominium association.

First reach out to your agent or company. Let’s be honest here, most of them don’t know their ass from their elbow when it comes to flood. I admit, it baffles and befuddles me all the time. If you can, reach out to the NFIP ( national flood insurance plan). They have so much data, resources,help and brochures that it will consume you. But they are your best resource, if you are looking for the right answers.

What is RCBAP?

RCBAP stands for Residential Community Building Association Policy.

The RCBAP is set up to cover condo associations through the NFIP. You must be a condo complex, not a HOA or a PUD. You must have at least 75% of your floor space be residential.

What you get?

You get a policy covering the condominium with limits up to the building value or $250,000 per unit or whichever is less.

Ask your agent for more details.

Zurich offer of Excess Flood insurance

Zurich announces it will offer Excess Flood Insurance

Last May Zurich announced that it would fill the gap on flood insurance. Condominiums face a huge problem in that the only place to turn often is the NFIP ( the national flood insurer).

The problem is that they will only cover up to $250,000. More if they consider cover for each unit owner @ $250,000.

There are not enough insurers that cover excess of the NFIP.

Companies and programs for flood have popped up and gone away as fast as they have started. One major claim, or a restrictive reinsurance market, and the opportunity for coverage is gone.

The industry needs more insurers to step up and fill the coverage gap for flood.

Board members personal liability exposures Condominium

When you sit on a board or you volunteer, you are doing a good thing and the right thing, but you are exposed and could be liable.

Where are your exposures?

  • Decision making on the board- Make sure you have a directors and officers liability policy in force. Wrong decisions can cost you money, and don’t look to your homeowners policy for coverage.
  • Personal injury- could you libel someone, could you wrongfully enter a unit? sure you could.
  • Human resources- have you ever fired someone, or hired the wrong person? You might be liable. Think about employer practices liability insurance (EPLI)
  • Injured worker- make sure you have workers compensation
  • Liquor- have you ever served liquor in your unit at a meeting? Where did the person go when they left? You might be responsible

There are any number of other exposures out there. Serving on a board does not relieve you of liability. Check your insurance coverage. Without the proper insurance, it is like walking around with your wallet hanging out of your pocket. You are sure to lose some money.


Mold kills dog

If you have not gone anywhere lately, because you thought you might miss Ed McMahon coming to your door with a giant check from publishers clearing house.

Then Go out! Ed is not coming, he has bigger issues. Ed claims that mold killed his dog and that the insurance company is to blame.

Read more here in an article by David Alpert of ABC News.

Mold is a serious problem, and left unabated, or unchecked, it can kill you or your pet. Whether or not it was the insurance companies fault is up to the courts to decide, but poor ED has to live in a temporary shelter for $23,000 a month.


How much does the agent make on a condo policy?

trust meI got asked this question today, and there is no set answer. The only answer I can give you, is if you ask, they will tell you two things. One it is less than it actually is or dance around the question, and two they will tell you it is worth every penny.

When an insurance agent sells a condominium policy to an association from a company they represent, they typically receive a commission, or a percentage of the premium for their services.

This can vary, but the range can be between 10% and 25% depending on the company, and the function they perform, or whether there is another middle man or sub agent involved.

These commissions might seem high, but any good agent can and should justify their fee. They are educated consultants, that have expenses to pay like any business. I have heard that the highest cost of acquiring business is insurance, and the cost to put it on the books, takes five years to recoup. Whether that is true or not, I do not know.

So, if you don’t use and agent, should it be cheaper? The answer is no, you can usually get the lowest price from the agent, even though they are getting paid. The best part, is that you are getting real advice from someone who is not an employee of the company.


What is a risk purchasing group for a condominium?

More and more we see Insurance companies and programs use a “Risk Purchasing Group”

What exactly is a risk purchasing group?

Under the Liability Risk Retention Act of 1986, a purchasing group is any group of similar businesses who share common risk characteristics and who band together to purchase liability insurance. There are legal requirements as to how the group formulates itself, but the goal of joint insurance buying is sufficient reason for its existence. Risk purchasing groups purchase liability insurance coverage from insurance carriers. Risk retention groups provide liability insurance and act as and are treated as insurance companies with capital requirements.

Is this Ok for our condo? If one members fails to pay, can we get cancelled too? ,can a large claim made by another condominium lead to my cancellation?

The answer is yes in some cases, and no in the next two, but in reality, sorta, kind of it can. If the risk purchasing group has generally poor performance, the rates will go up, and the insurer backing the group could back out. They are OK, as long as you know what you are getting into. There is a fee to join.



5 unique condo insurance risks

top-5-condominium-questionsStandard condominium policies have standard coverages and standard exclusions.

Not all condo’s are standard, and not policies cover the unique insurance coverages you may need.

Some unique coverages that you may not find on your policy.


Top 5 unique insurance coverages:

  1. Liability for functions such as Liquor, security, and workers compensation for uninsured contractors
  2. Watercraft and marine liability. some condos have water and marina exposures.
  3. Automobile liability- even if the association does not have an auto, it has an exposure. see Hired and non owned auto liability.
  4. contingent business interruption. You may have loss of income coverage for loss due to direct damage, but what happens if the loss is related to an off premises loss.
  5. cyber security- You keep a lot of very valuable and private information. If that security is breached? Do you have coverage?

There are lots of things to think about before you finalize your policy. Tell your insurer about all the things that worry you.