Tag Archive for insurance

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.

 

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.

 

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.

 

Condominium Deck Collapse

Who is to blame?

 

The condo Law Blog says this:

Wildwood Missouri residents who reside at the Sandalwood Creek Condominium Community need to look up at all times, especially to avoid  collapsing decks.  A deck attached to a residential unit collapsed this past Memorial Day when four people were standing on it.  All four are now in the hospital.

County officials came to the scene to evaluate all of the decks in the community and the news is not good.  It appears they may not meet current code requirements and some news reports report findings that other deck collapses in the community are foreseeable.

The decks are 30 years old and it appears many have not been properly maintained.  Some appear to be rotting.   One news crew found a decks that was visibly sagging, suggesting that it may be next in line.

So –who is responsible to repair these decks?    Of course it depends on state law and the association documents.  But in many instances, the homeowner will be responsible.

The reason is that these decks are often called “limited” common elements.  They are common elements because they fall beyond the “finished walls in.”  But they are “limited,” because only the adjoining unit owner can enjoy them, or in this case fall from them.  In these cases often it is the unit owner who must maintain, and if need be replace, the deck structure.

Some news reports suggest that this is the case in Wildwood Missouri.  But everyone may not agree and ultimately a Court may have to interpret the documents in question.

Who ever is responsible aside, decks must routinely inspected and maintained.  And they must be replaced when they are no longer safe.  Even if common funds will not be used to do this, the Association usually has the inherent right to ensure that this work is undertaken on a regular basis.

Stuart Lieberman Is an attorney with Princeton’s Lieberman & Blecher.    The firm represents community associations in New Jersey and New York.  www.liebermanblecher.com

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

 

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.