Tag Archive for Price

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.

 

 

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.

 

Where is the best place to buy Condominium Insurance?

The best place to buy insurance for your unit, or your association master policy is from someone who knows first about insurance and more specifically, someone who knows the ins and outs of a condominium.

This is tricky stuff. Find an agent, or a company that specializes in this business and ask them all the right questions. If you think you are getting the run around, then you do the running around and call someone else. There are plenty of good quality agents, companies and specialty companies that can handle your business.

Start looking in your industry publications, ask your neighbors, and ask the board, or the property manager who handles the association business.

Insurance might feel like a commodity, and they are all the same, but they are not all the same. The cheapest price is not always the best policy.