in a hard insurance market only if you have assembled the right players and information – and you are addressing concerns and potential underwriting pitfalls throughout the year – not just in the two or three months prior to renewal.
What do we mean by that? First, you must know who you are as a community and how attractive you are (or are not) to the carriers. Properties experiencing the highest increases typically are:
Coastal or within five miles of a large body of water; catastrophe-prone communities (those with wind and water exposure in particular) are finding the steepest increases.
Communities with large wood frame structures (over $4 million per structure).
Communities with wood frame structures of four or more stories (with or without masonry pad).
Communities with frequent and/or severe claims.
Communities with building defects or issues including:
Older roofs (carriers may opt to insure roofs 12-15 years or older only on an Actual Cash Value (ACV) basis rather than on a Replacement Cost (RC) basis.
Older wiring issues including aluminum wiring, knob and tube wiring, and Federal Pacific or similar electric panels.
Older or otherwise problematic plumbing,
including galvanized pipes, polybutylene pipes, and aging copper pipes with a history of pinhole leaks.
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Downspouts that empty onto paved surfaces, creating slip and fall exposures, particularly during the winter.
Older, high-value buildings that are not fully sprinklered.
High-rise buildings in general.
Communities currently insured through the Excess and Surplus (E&S) insurance market; in addition, re-entry into the standard market may take longer than in previous years.
Second, just as a team that wants to get to the Super Bowl must prepare, community associations need to prepare a strategic plan coordinated between the broker (your coach), the board of directors (your team’s front office) and management. Recognize that a winning team evolves using a
long-term strategy supported by a consistent, multi-year plan. Here are a few practical steps to consider implementing when it comes to managing your risk:
1. Understand the lifespan of your community’s water heaters and initiate a water heater replacement program.
2. Require owners to install burst-resistant (braided steel) washing machine hoses.
3. Install pans under washing machines and water heaters.
4. Many policies include language that freezing is covered provided you do your best to maintain heat. Set a minimum heat setting requirement of 55° - 60° for units when owners are away.
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