Al
Alll community manager
ers an
and
homeowner leaders should have knowledge of the risk
management inspections that are typically done on your
community associations by your insurance companies. You may also know them as loss control reports, risk management
surveys, or some other synonym.
As we are now closing in on being in the insurance industry’s current hard market (premium increases, deductible Increases, and more difficulty in obtaining desired insurance coverage) for 4+ years, community associations are finding these risk management inspections have become much more important to the insurance companies. There are many reasons for this. This author believes the primary reason is the fact that there are far fewer insurance companies willing to write insurance policies on community associations, and they must protect whatever capacity the have budgeted for this class of business during this hard market. This means using this capacity on risks that are less likely to have
future losses, that have a good loss history, that have a good risk management process / outlook, and are cooperative in regard to the recommendations made by the insurance company. The evidence you are, or will be, seeing that confirms these risk management inspections are growing in importance to our insurance companies include, but of course not limited to, the following;
uture l at have
Risk management inspections on a more frequent basis (for example: every 3 years now instead of every 5 years).
Risk management inspections on community associations that never had them before, such as homeowner associations where there is no association property insurance on the residential buildings and no association amenities.
Loss control recommendations being made on a risk or an exposure that never had a loss control recommendation made on it previously. Keep in mind the
capaci
capacity issue mentioned earlier in this article.
issue mentione
Insurance Companies now following up on recommendations that the community association did not respond to and are ignoring. Once again, remember the aforementioned capacity issue.
Insurance agencies and brokerage firms now hiring their own professionals to do risk management inspections. The rationale behind these is to allow the insurance agency / brokerage firm to get ahead of any problematic exposures and get them addressed. These inspections are now also being used by insurance agencies and brokerage firms to promote certain community associations to the insurance companies.
What gives insurance companies the right to come onto your community association premises
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