Tag Archive for condominium

Do we need sprinklers in our condominium

The question of do you need sprinklers in your condominium comes up all the time.

I wish I had the answer. The answer lies with you, and also with the law. If you feel that it is in the best interest of the safety of the condo unit owners, then you need them. If it is the law, then you need them.

sprinkler for your condoDo sprinklers save lives. Yes!  Do they save property Maybe! In actuality, sprinklers freeze, leak and inadvertently go off causing water damage. is the risk worth the reward? I think so.

The laws are all over the place. From what I see, they are very specific if you have new construction and or doing a major renovation. Check with your local building inspector before going forward. This can be expensive.

If you are renovating, you might find that the local codes require you to add the sprinkler system in your condo. If so, and you feel that it is not right, you can appeal in most areas.

The appeals board will look at the law, and whether it is reasonable to ask you to do this. If the renovation is for $10,000 and it would require a $60,000 investment in a sprinkler, is that reasonable?. Can it be done? If the project does not include opening the walls, then it may not be reasonable to ask you to do it.

The law looks at standards. The standards are not the same for a 1-3 unit condo as it is for a high rise, and the standards of a nightclub are not the same as a condominium complex.

Good luck!  remember to check your local laws.

5 steps to understanding your condominium insurance policy

5 steps to understanding your condominium Insurance policy.

condo insurance

Let’s face it. Chances are that your agent did not even read the policy. They probably packaged it up, attached a bill and mailed it out to you. The reading usually starts after there is a loss.

The damn thing is 70-100 pages long, and reads like Obama’ affordable care act.

 

 

What to look for.

  1. start at the first page ( the declarations page) This has most all the salient information, and a good summary of the coverages.
  2. Check to see if the named insured is correct. Do they have the right name, the right contact, the right mailing address.
  3. Check the limits of coverage for the building and liability. Do they look right. Compare it with the previous policy.
  4. Does the premium match the invoice?
  5. Give everything a once over, and then call your agent or company representative and go over it with her or him. Ask questions, Ask for it in plain language, and ask lots of questions, the agent and company have your money, and they are providing a service and coverage, so don’t feel bad about asking questions.

The problem is that we trust people and you should, but it is a big expense, and you are liable for checking out the policy and making sure it is correct. do your due diligence.

 

 

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.

 

Holiday Hazards for your Condominium Association

The Holidays are upon us and with that brings risk.
What is risk? Risk is an insurance term for the chance that something might happen.

What could go wrong at the holidays and Christmas?

How about?????

1. Live errr dead and dry Christmas trees indoors.( have you ever lit fore to a dead Christmas tree? they go up like a bomb)

2. Over loaded sockets. More lights, more cords, more chance of an electrical fire.

3. fireplaces. We look at them all year until we think we need to have a little holiday ambience. Then we realize that the flue has not been cleaned in years, or that there are wholes in the brick that release sparks into the condo.

4. We go away. What better time to see the relatives out of state, or go on vacation to get away from all the nonsense. Did you keep the heat on? Did you turn off the water to the washing machine, did you secure the condo from thieves?

These are a few things to keep in mind at the holidays at your condo unit and association.

Happy Holidays from the Condominium Insurance review
Keeping you safe and informed 365 days a year.

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.

 

 

Lawyers review of condominium insurance needs

I subscribe to a number of condominium industry newsletters. One of the best is by industry leader Goodman, Shapiro and Lombardi.

You can subscribe here by going to this link.

GSL is starting a series on what is necessary and what you should have for insurance for your condominium association.

part one, talks about the basics and what you need to get by, and of course what makes you legal.

The highlights in this part include:

  1. insuring your condo association for Property, general liability,energy equipment,flood and directors & officers liability.
  2. What is required by Mass law 183A
  3. What the minimum crime coverage is required.
  4. Not falling into a gap with your unit owners homeowners policy ( HO-6 is the insurance lingo)

Check out their blog and sign up for their newsletter to read the rest of this series on insuring your condominium and your unit.

 

Boston Condominium Fire

What does a $1,000,000 fire look like?

condo fire

 

 

 

 

 

condominium fire in back bay

 

 

 

 

 

condo fire damage

 

 

 

 

 

 

 

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