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Condo Association Insurance
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Regardless of the size of your condo association or HOA, our insurance partners will ensure your community association gets the right coverage.
Simply fill out the form a financial service partner will contact you directly and can often provide a Condo Association Insurance quote on the spot.
About HOA Insurance and Condo Association Insurance
If the condo building is not covered for an amount that will adequately replace the building in the event of a total loss, there can be major problems, even if the condo building is not completely destroyed.
By not insuring for the amount the condo building is valued at, you can trigger a condo association policy’s co-insurance clause. Co-insurance states that if the insured condo association has not properly valued the replacement cost of the building, the insurance company can reduce a claim settlement to reflect the proportional amount that you insured, and then reduce it further by whatever the penalty is in the contract. An example of how this works is if the actual replacement cost of the building is $1,000 and you only insure it for $800, you have now only insured to 80 percent of the building’s value. You now have a $300 loss. They will say that you underinsured by 20 percent, so if there is a 150 percent co-insurance penalty, you will be penalized 30 percent on your claim settlement. They will pay you only $210. Now subtract your deductible and that will be the check that you receive.
On the other side, if the building is overvalued, you may be paying money for condo association insurance coverage that is not necessary, which will end up wasting the condo association’s money.
How is a lay condo board supposed to come up with a proper valuation for the cost of rebuilding? Our solution to this problem is to provide the board with a Marshall and Swift replacement cost worksheet so that you can feel comfortable with value used to protect your condo association assets.
How To Buy Condo Association Insurance
Purchasing condo association insurance is one of the most important buying decisions the board will make. The decision addresses risk management and must meet or exceed any insurance requirements mandated by the state and the HOA’s governing documents.
Step #1: Start Early. Begin the process at least 90 to 120 days prior to the renewal date by ordering updated loss histories from all insurance carriers who have provided coverage for the Condo Association for the past three to five years. While requesting the loss history, don’t forget to confirm with the current agent/broker his opinion as to whether the current insurance carrier will be offering a renewal.
Step #2: Check Loss History Accuracy. Losses can be miscoded (like “Mold Claim,” when it wasn’t), or a loss that should have been attributed to a different insured or a loss that continues to appear on the loss history even though the insurance carrier successfully subrogated against the negligent party (got repaid). It’s also possible your carrier’s version of your loss history doesn’t really reflect today’s condition of the property. If your HOA has taken steps to improve the property since the losses occurred, write a narrative about those steps taken and attach it to the loss history. If a particular problem has since been corrected, make sure the carrier knows it.
Step #3: Assemble a Complete Bid Package. Preparing a complete bid specification will make the evaluation process easier. The bid package should include:
Brief description of the property including the number of units, year built, type of construction, overview of amenities (pools, spas, etc.) and any other structural improvements the HOA may have an insurable interest in;
Copies of the governing documents;
Copy of the site plan;
Current three year loss history on the prior carrier’s letterhead;
Copies of the declarations page from the current year;
Copies of the HOA’s most current financial statement and budget; and
Current appraisal (if available).
Steps #4: Assign the Markets. An condo association insurance carrier will only release a premium quote to one agent. If more than one agent wants to use the same insurance carrier, you’ll have to assign which person will access that market on your behalf.
Step #5: Evaluate the Insurers. While there are five well-known insurance rating organizations, most HOAs rely on AM Best. The letter grade ratings (A through F) and financial size categories (Roman numeral I through XV) can give you a quick barometer of a carrier’s health. In addition to the financial ratings, the board will want to consider the carrier’s experience with HOAs. A carrier who is new to the homeowner association market is probably not a good fit.
STEP #6: Is the Agent Qualified? Consider years of experience insuring Condo Associations and HOAs and involvement in industry trade organizations like California Association of Community Managers (CACM), Oregon Washington Community Association Managers (OWCAM) and Community Associations Institute (CAI). The agent/broker professional designations should include CPCU (Chartered Property and Casualty Underwriter), ARM (Associate in Risk Management), CIC. (Certified Insurance Counselor), and CIRMS (Community Insurance and Risk Management Specialist).
STEP #7: Use a Spreadsheet. Even the most experience risk manager will create a “line by line” comparison of the coverages and benefits being offered by the various companies offering a proposal. A visual representation of this type will easily illustrate the merits or deficiencies provided by one proposal over another and will tell you if a certain proposal is competitively priced only because the agent/broker has omitted an important insurance coverage.
STEP #8: Let Price Be the Last Consideration. Price is important but don’t fall into the trap of going to the “bottom line” first. If you do, you may forget the number one goal of buying insurance: protecting the HOA’s assets. Be certain that you’re getting what you need before signing the check.
What is a Flood?
Anywhere it rains, it can flood. A flood is a general and temporary condition where two or more acres of normally dry land or two or more properties are inundated by water or mud flow. Many conditions can result in a flood: hurricanes, broken leaves, outdated or clogged drainage systems and rapid accumulation of rainfall.
Just because you haven’t experienced a flood in the past, doesn’t mean you won’t in the future. Flood risk isn’t just based on history, it’s also based on a number of factors: rainfall, river-flow and tidal-surge data, topography, flood-control measures, and changes due to building and development.
Flood-hazard maps have been created to show different degrees of risk for your community, which help determine the cost of flood insurance. The lower the degree of risk, the lower the flood insurance premium.
Floridians understand the serious damage that floods can do in. Even the small ones can often leave their mark of destruction. However, flood coverage can often be overlooked, since it’s not included in a standard homeowners policy. Often, Florida residents find out about this much too late.
Our agents work hard to find the flood policy you need to protect your home and property. We work with differents carriers in order to find the coverage that best fits your needs and budget.
We want you to be confident that our flood policy will come through for you to protect your property from water damage, sewer backup, and mildew resulting from floods. Besides paying for repairs to your building, our flood coverage also includes expenses to pay for your damaged contents.
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