Tag Archive for claims

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.

 

Top 5 condominium claims

What are the top 5 types of condominium claims. I want to say water, water, water water and more water, but that would be just slightly over-stating the common claims at a condominium.

The top 5 types of condominium claims are:

  1. Water- you guessed it water damage claims make up the majority of all claims
  2. Liability- trips and falls at the premises. whether they are real accidents, or reports of injury, these are far too frequent, and can be very costly
  3. Fire- while not as frequent, it is the most severe.
  4. Breakdown – systems break down and energy equipment coverage covers the loss. Whether it is a steam boiler that blows, or an elevator that breaks, or an electrical panel that fry’s.
  5. wind- windstorms blow and take everything with it. They knock off siding, they blow stuff off the roof and tear property apart.

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Who Pays For the Property Managers Extra Charges?

 

Claims expenses from a property manager can be costly.

What can you condominium do to insure the extra expense? Most contracts between the property manager and the condominium association do not cover these extra expenses

Property Manager Claims Expense:

The role of your property manager is extensive!  They are responsible for general upkeep and maintenance, managing income and expenses, negotiating contracts, enforcing rules and regulations, and making sure your building is safe and secure for its tenants.
In the event of an insurance claim a lot of paperwork, documentation, and extra work needs to be done!  If your property manager has to work extra hours or pay additional expenses your association may be getting an extra bill.  Having an additional “Property Manager Claims Expense” on your insurance policy will help with these unforeseen costs.
Heavy snow in New England last year caused a few roofs to collapse in my area.  A property manager at one of the condo complexes explained what the claims process was like.
It began with an emergency call in the middle of the night and a cold ride to the condominium.  A few pictures of the damage, lots of documentation, and a call to the insurance company were just the beginning.  The added hours of relocating the tenants, meeting contractors, visits to the site to make sure work was being done in a timely manner, all added to her regular workday.
If your condo association has a claim the property manager’s added expenses will probably be billed to the association.  Extra coverage on your insurance policy will help pay for these expenses.