Insurance is usually one of the three top expenses for any condominium or homeowners’ association. You don’t want to be left with costly repair bills should a calamity hit your building. Even though the rates are as low as they were before Hurricane Iniki, there are still ways you can reduce insurance costs. Here are a number of ways to save some money at the outset:
Knowing what to do before a loss can save you money on the claim itself, so set up a claim procedure in the event of a claim.
- When it is time to re-roof use fire retardant materials.
- Look at installing hurricane clips. This can save you up to 10% on your property premium each year. At the least, clip the roof to the wall. The contractor can do this job as he replaces the roof.
- A poorly maintained project can cause more claims; more claims could increase your premium or your deductible. It’s better to maintain your building, which is less costly in the long run.
- Hire a licensed plumber to inspect all shut-off valves and water-bearing appliances in each unit every 7 to 10 years. Advise owners of what appliances need repair, replacement, or are OK. Be sure to appoint the manager or a committee person to follow up to ensure owners make the repairs.
- Schedule routine property inspections to guard against falls or slips that may be a liability. Ask your insurance company to conduct a loss prevention inspection. An insurance expert will note potential problems that, once corrected, can result in fewer claims, allowing you to save money on your insurance.
- Get certificates of insurance from all vendors and have your association named as an additional insured. That way if a claim is filed, it is on the vendor’s policy.
- Volunteers can get hurt when working on a project, so use caution when volunteers are working. Should they get hurt while working, it can cause a claim against the association’s liability policy.
Directors and Officers
- Don’t show favoritism in and business transactions– it can be construed as discrimination, which is the number one claim against associations.
- Read and know your contracts and follow them. If you have a 60-day cancellation clause, provide that notice to your vendor. Breaking contracts could cause a claim against your directors.
Ensure board follow policies on reserves
- Follow your reserve study. If costly repairs are needed, set up a reserve plan and raise fees as determined by the reserve study. If fees must go up 10% for a repair project, then they must go up. Boards that have not raised fees for years are not doing their fiduciary duty.
- For those associations that have employees make sure they have the correct safety equipment and tools are in good repair. Workers’ compensation policies are experience rated. A favorable loss record could get you a discount on your policy, while claims will increase your premiums.
- Hire a professional for dangerous jobs. Do not ask your employees to do a job if they do not have the required skills.
- Employees should attend safety classes and adhere to all safety protocols.
Think of your association as a business to protect your community’s assets. The best way to ensure that it runs effectively and efficiently is by making sound business decisions once you have all the facts. Know the consequences of your decisions and decide issues with the interests of all members foremost. A well-run association is one insurance companies will want to insure.