The insurance market like most businesses or the stock market experiences both highs and lows. The property and casualty insurance market of the last few years has been like being on a roller coaster making its initial climb. As the coaster ascends the lift hill, the anticipation rises with each clickety-clack. The hard insurance market is still in the clickety clack phase of the roller coaster ride. The insurance outlook for community associations continues to harden.
ns
When the insurance market hardens, premiums increase and underwriting becomes more strict. Carriers are less likely to negotiate pricing or terms. There is strict adherence to underwriting guidelines and careful consideration of the overall condition of a property. This creates limited capacity within the insurance market.
The increased costs of building materials and labor shortages have made it necessary for many carriers to require higher property limits. This not only increases the premium, it also increases the association’s potential out of pocket expense. For example, wind and hail deductibles are often based upon a percentage of the property’s insured value.
The aging infrastructure of a property and deferred maintenance further limit an insurance carrier’s willingness to offer coverage. This makes it extremely important for an association to keep up with maintenance and replacement of outdated electrical systems, roofs, plumbing, and heating systems. Underwriters will want to know the dates of the updates and details regarding the extent of the updates. It is not just a contributing factor when it comes to pricing, it may altogether affect an association’s ability to obtain coverage. It is critical to maintain the association property as well as the records of the maintenance and replacements.
The market for liability coverages such as general liability, directors and officers, and umbrella, historically stable, have also been affected by the hard market. The rates for each of these coverages continues to rise as the number of claims filed and settlements grow. However, most notable and alarming is the limited capacity for umbrella coverage. It started a few years ago with carriers reducing the limit of coverage they were willing to write and increasing premiums. The landscape of the umbrella market today is barren as many carriers have altogether exited the market. It is uncertain if they will return. The carriers that remain are inundated with lengthy applications to review which has increased the lead time to obtaining quotes. The quoted premiums significantly higher than customary.
Whether your association is condominium, townhome, or single family it is recommended you work with an insurance agentwellversedinthe nuancesofthe community associationinsurance marketplace. They
canassistin
finding insuranceproductsand marketstocoveryour association’s needs through the hard market. The roller coaster will continue to clickety-clack up the lift hill but your safety harness is the knowledge and experience of your association insurance agent. HANG ON TIGHT, AIRTIME WILL COME!
www.cai-illinois.org • 847.301.7505 | 17
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56
