Timothy Cline Insurance Agency, Inc.
Homeowner Associations »
Frequently Asked Questions
Question: How long does it take to get a quote?
Answer: Unlike auto insurance, each association is different so there
is no standard of risk. Therefore, each commercial property submission
is reviewed independently and rated individually. Typically,
steps include property inspection, applications, submissions
to markets, review of place history, and release of the quote.
The entire process should take 20-30 days to complete.
Question: Does my association need to maintain Property Coverage?
Answer: Yes. All Lenders require it. Without it, no units will be sold
or refinanced. In addition, it is just a wise decision to obtain
insurance. Most people will not be able to rebuild should their
unit be destroyed or damaged, and insurance allows security
should a catastrophe hit.
Question: My Association
had no claims, why did our premium increase this year?
Answer: Unfortunately, claims are just one factor considered by a carrier
to determine an association’s premium. Claims paid
out on an entire class of business can have an effect as
well.
For example, if there is a large catastrophe, such as a hurricane
or earthquake, the carrier must make up for the claims they
pay
out, whether or not your particular association was involved.
Another factor not often considered is the Stock Market.
An Association’s
premiums are reinvested by the insurance company during the
policy term, and the returns on those investments are used
to keep the
premiums low. If those returns are poor, it may cause the
rates to change.
Question: How do I keep my premiums as low as possible?
Answer: Most importantly, show the carrier you are not a risk. Prevent
claims and be proactive. Inspect the premises for trip-and-fall
hazards and eliminate them. Replace worn components to
prevent a future claim. Keep the Association well-maintained.
Also, accepting
a higher deductible amount will lower the premium.
Will the policy pay for the entire damage, even if it is
higher then the limits on the policy?
Not typically. Most carriers will only pay up to the loss
limit of the policy after the deductible. This is why it
is imperative
to have the correct limits and be insured for the full
replacement cost of the property.
Question: How do I know if I am
insured to the full replacement cost?
Answer: Insurance brokers and carriers are not appraisers, nor
do they warrant adequacy coverage. The only way to make
absolutely sure
you are insured for the correct amount is to have an
independent appraisal firm out to the association.
Question: I paid
$500,000 for my unit, but according to the insurance policy,
the limits, when divided by the number of units,
only equates
to $250,000. What gives?
Answer: Market value is not the same as replacement cost. When
re-building a unit, there is no consideration taken
for land value.
Question: Why is my carrier non-admitted? Are
they disreputable?
Answer: Many times a broker just cannot place coverage with
an admitted carrier, and must look to non-admitted
carriers
as replacements.
Non-admitted carriers are just as reputable as admitted
carriers, having to pass similar rigorous rules and
regulations within
the state they are admitted in (a non-admitted carrier
may not be admitted in California, but is typically
admitted in another
state)