Tag Archive for property

What is agreed amount?

What is agreed amount?

Agreed amount is an insurance term on a property policy that waives the coinsurance clause. Coinsurance is a penalty feature put on a policy to prevent people from underinsuring.

Once the insurer has determined that you have met their guidelines for proper insurance to value, they will eliminate the coinsurance clause and replace it with the agreed amount clause. thus eliminating the chance of a penalty.

You are still required to insure to the proper limits, but this essential clause will come in handy, if you or the insurer has made a misjudgement in the amount you insured the property for.

There is little or no cost for this useful endorsements.

 

How to choose a deductible for a condominium

There is almost always a deductible on a condominium policy.

Deductibles are essential to risk management. Deductibles allow for risk sharing. With a deductible there is skin in the game for all parties.

You can control how much skin in the game you want. The bigger the deductible, the lower the premium.

Insurance companies use deductibles to eliminate nuisance claims, or normal maintenance claims, or to eliminate repeated smaller claims.

How much of a deductible is right for you?

  1. What can you bear? How much can you assume of a loss?
  2. What is your claims history?
  3. What is the cost savings?

If you have no history of claims, and you have adequate reserves, and you are not risk adverse, then take the biggest deductible that you can handle. Be careful to weigh the cost benefit to the increase in deductible. If going from a $1000 deductible to a $10,000 deductible saves you $100 per year, is it worth it? Probably not, but if it saves you $3000, then go for it. The savings will pay for it self in just three years.

Most common deductibles for a condominium association are:

  • $1000
  • $2500
  • $5000
  • $10000

There are many different kinds of deductibles on your policy, so be sure that you understand that if the property has a $1000 deductible, you might have a 5% deductible  for flood or earthquake, and you may have a separate wind deductible, or no deductible at all on certain coverages.

Contact your agent or representative for a further review.

Use the power of knowledge to control you own destiny and policy.

 

 

Condominium Insurance Basics

Insurance can be daunting even for the professionals. A condominium insurance policy is a contract between the condo and the insurer. It is long and legal looking and ambiguous at best. Find a good agent who specializes in condominium insurance and review all of your exposures and watch and understand these five basic coverages:

  1. Property insurance
  2. Liability insurance
  3. crime insurance
  4. professional insurance
  5. worker/vendor/employee insurance

If you have a working knowledge of these basic coverages, You should be able to make the right decisions for yourself and your condominium association.