If you are a homeowner or an office space owner, or if you have any kind of property to your name, you know exactly how important insurance is. It is not only crucial for your real estate to be protected in case of devastating damage but also for the ease of mind and the overall feeling of safety and peace for those living or working inside.
With Condo Associations, insurance is even more important because it covers dozens of families and all of their immediate surroundings that their condo complex encompasses. This type of insurance typically provides coverage for all the shared areas of a building, both inside and outside. Most notably, the complete set of common areas that includes corridors, courtyards, elevators, the gym, the basement, and the swimming pool are insured.
Depending on the kind of building and its features, your master policy (another name for condo association insurance) should be tailored to meet the specific needs of your building and its tenants at the best rates available on the market.
With that being said, how do you actually get cheap quality Condo Association insurance, and is there a way to do it at all? Read on if you wish to find out and make sure to read more if you have any further questions or interest.
1. Shop Around
One way to save a great deal of money is to compare insurance quotes from multiple companies, which you can easily do with a little bit of research and reading. However, collecting this information will take time, so consider speaking to an insurance agent to get quick quotes from different insurers, as well as to get the best recommendations and advice. Alternatively, contact your state insurance department, contact insurance companies directly, or get free quotes from one of the many online services, forums, reviews, or rating lists.
After narrowing it down to a few insurers that seem the best option for your case, check their financial ratings from companies such as Fitch Ratings, Standard and Poor’s, Moody’s, and A.M. Best. In addition, to get an idea of how each company would perform in the event you filed a claim, read insurance reviews from those who have already dealt with this before you. You can also visit the National Association of Insurance Commissioners for information on insurers in your state, including consumer complaints. This is arguably the best way to learn from people who have had both positive and negative experiences.
2. Increase Your Deductibles
A deductible refers to the amount you have to pay out of pocket toward an insured loss before your insurance company starts to pay for the remaining damages. So assuming your Condo Association has a deductible of $10,000 and you file a claim for $300,000 in hailstorm damage, you would have to pay the $10,000 first before the insurance coverage kicks in and covers the remaining $290,000.
Be aware of deductibles that are applied separately for a higher dollar amount. These include windstorm or wind and hail deductibles, hurricane deductibles, and named storm deductibles, which are often expressed as a percentage of your building’s insured value. Therefore, a 10% wind and hail deductible on a building valued at $600,000 is $60,000, which can be extremely hard to cover for a number of condo associations.
3. Ensure You Have the Right Amount of Coverage
The amount paid to build your condo is not the cost it would take to rebuild it in the event in which it is almost completely destroyed by a covered peril. For starters, the land your condo sits on is not at risk from fire, theft, hurricane, or other covered perils in your master policy. Therefore, the land value should not be included when deciding the actual value of the condo to avoid paying a higher premium than you should. The land is already there and paid for, and it cannot be damaged like the building so why should it be covered the same? If you manage to do this, you will shed off some unnecessary load off your premium.
4. Make Your Condo Building More Resistant to Natural Disasters
Natural disasters such as hurricanes, storms, and wildfires can cause severe damage to your condominium building, resulting in your association having to file a large insurance claim. For instance, according to Risk Management Solutions, insured losses from Hurricane Sally are estimated to cost somewhere in the range of $2 billion and $3.5 billion. They also estimate the insured losses to onshore properties from Hurricane Laura will range from at the lowest $9 billion to as much as 13 billion. These are astronomically large amounts of insurance money, which means the damage to properties was devastating.
There is a lot you can do to prevent increased damage to the building and the individual condos. Taking steps to make your condominium less at risk of such disasters could result in lower premiums. These safety measures include things you and the tenants can easily, which may be a difference-maker when things go south. Consider doing the following before a potential scenario occurs when it will be too late.
Reinforcing your roof or upgrading your roofing materials against leaks
Installing impact-resistant windows against wind and hail
Adding storm shutters for further external door and window protection
Regularly cleaning, maintaining, and upgrading the plumbing system
5. Make Security Upgrades
Have you ever asked yourself the question of how secure your condominium is from fire, burglars, and other related claim events? Making it even more secure could qualify you for a Condo Association insurance discount since the agency will see you have made an effort in protecting everything and everyone involved. To safeguard against fire, consider installing smoke detectors, a sophisticated sprinkler system, and a fire alarm that automatically rings at the local fire department.
You will also need a fire extinguisher and a basic first aid kit next to each other on every floor. As for reducing the risk of vandalism and theft, invest in quality locks and a burglar alarm that alerts the local police and installs deadbolts on all exterior doors and windows in the condominium building. Of course, a set of security cameras is a must in this day and age. Make sure to install them in all the right spots, both where people usually move through and in the less-visited areas.