What is called today Tough insurance market It is the result of a perfect storm. Standard personal injury claims have led to a higher cost of liability insurance. Comprehensive excess liability protection policies are shrinking, with fewer carriers offering less coverage at higher rates. Property insurance premiums are rising due to increased labor and material costs. Reinsurers, companies that insure insurance companies, also raise their rates.
But there are ways to Cooperative and residential councils To weather the storm. Here are three areas where they can control insurance costs:
1. Violations. Clear all irregularities with Buildings department (DOB), whether the problems are construction-related or limited to individual apartments. “The more violations you commit—particularly those that insurers see as a risk to a future liability claim—the less likely they are to renew your policy or award a new one,” he says. Thomas Thibodeauco-owner of New Bedford Management.
To ensure they have a clean record, boards and managing agents can check the full breach history of their buildings using DOB Building information search or the Housing preservation and development‘s HPD online. An audit of records is particularly critical for cooperatives that have done so sponsorswhere boards of directors may not be aware of old violations that were never remedied and still exist in city systems.
2. Claim and bid history. Claims are the biggest reason why insurance rates are going up. Carriers know everything when it comes to the facts about your building’s claims history over the past five years, thanks to something called Mass exchange underwriting for loss.
“Insurers look at these reports, also known as loss runs, and look for patterns and trends that could mean problems,” he says. Ed McCall, Head of insurance brokerage McCall’s Risk Solutions. It could be anything from repetition Slip and fallWhere insurance companies may believe there is a risk of tripping on the sidewalk or that the building is neglected in shoveling or salting after a snowfall, to several Claims of directors and officersWhich may indicate an ongoing problem with the board members.
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McCall adds that claim frequency can be more important than dangerous. “If you have five small claims for water damage and one large claim for fire damage, the water claims could be a bigger hit against you because there seems to be a systemic problem with the building,” he says.
It’s a good idea for boards and managing agents to review their loss history each year to get a better understanding of their buildings’ history and how this might affect future costs. While some prompts are unavoidable, seeing the big picture can help boards make smarter decisions in the future.
MacKoul also recommends boning mounts to your building Bid date. “When insurance brokers go into the market for you, they should give you a list of results — why this company declined, why that company raised rates,” he says. “If it’s due to violations or a series of losses, you’ll know the course corrections you need to make.”
3. Load distribution. As insurance rates continue to rise, some co-ops are trying to cut costs by getting shareholders to bear some of the burden. Most bylaws state that the co-op is responsible for paying the amount deducted from its principal policy. “But we’re starting to see a shift where panels split the cost when a problem in one apartment causes damage to the building’s structure or common elements,” he says. David Dockerya senior attorney in a law firm Becker and Polyakova. “In this case, the shareholder will be liable for all deductible amounts. If the damage extends to another flat they shall each pay half. If it also affects a common item, both the shareholder and the co-operative will pay accordingly.