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Specialty Insurance Coverages to Consider for Your Condo/Co-op Board

Condo and Co-Op Boards that manage the insurance policies for their community need to consider additional policies that are targeted towards the unlikely natural phenomenons that are happening more often.  Many of these policies have addendums for Flood, Earthquake, and Fire. Policyholders view these addendums as costly and unnecessary additions depending on location. In some cases, these addendums are part of the policy but lack the correct amount of coverage making them useless if something were to happen.

Research has found that residents of the home owners association may have more insurance coverage protecting their personal belongings in their condo or Co-op than the Association has to protect the building structures and common areas of their dwelling. Some association policies will have earth movement coverage, but the question is, is this the correct amount of coverage or even the right coverage in case an earthquake happens? Association Board members have found that these policies will have a high deductible negating benefits of the policy in its entirety if something catastrophic were to happen.

This can also be found with Association Boards and their flood policies or natural disaster policies. The Association has a responsibility to ensure that the policies they are purchasing for their building/buildings is adequate so that if something were to occur, their members would not be paying out of pocket. Working with Navigator Risk Management, we put our condos through a full Risk Compass assessment to make sure that the board isn’t picking the cheapest policy, but the best policy to protect their association members.

Associations have a responsibility to ensure that the insurance that they are purchasing for their building/buildings is adequate so that if something were to occur, their members would not be paying out of pocket for damages done by a natural disaster.

Named Perils- Fire, wind, hail (Ciara needs more information on these)

Below is a table of common scenarios that are covered and not covered by an association’s policy

Usually Covered

  • Fire & Smoke
  • Explosions
  • Wind & Hail
  • Theft
  • Vandalism
  • Lightning
  • Burst Pipes
Additional Coverage Required*

  • Earthquakes
  • Floods from an external source (Heavy rain or Storm Surge)
  • Intentional Injuries to Others
  • Nuclear hazards
  • Damage from pests (birds, rodents & insects)
  • Wear and tear
  • Damage from underground water (sewer backups)

*Please Note: we are not an insurance broker and what is included in an insurance policy is dependent on what is requested in the policy

Associations can and should add addendums to their policies to cover the scenarios In the right-hand column. They should consider several factors and work with a risk management team to determine the right coverage.

Our (Insert Name here) Audit is tailored for Condos and Co-Ops. We work with a local building company to do a floor-by-floor audit of all of the public spaces at your association’s location and provide feedback to you, the Association Board.  Included in our audit, we take drone footage of your roof to assess the remaining life span and look for damages that could turn into problems down the road. After our analysis of the building, we do an audit of the insurance coverage your building has purchased.

Our Coverage Audit puts your policy side by side with other policies available for your association to purchase at renewal time. Here you will see an easy-to-understand breakdown of the differences between your current policies and other policies that you qualify for. Additionally, you’ll work with one of our Risk Specialists to help make the right decision for your Association Board.

In conclusion, Condo and Co-Op Boards must prioritize comprehensive insurance coverage tailored to the increasing frequency of natural disasters. The complexity of addendums like Flood, Earthquake, and Fire policies necessitates careful consideration to ensure adequate protection for both buildings and residents. Navigator Risk Management offers expertise in conducting thorough Risk Compass assessments and Building Audits, empowering boards to make informed decisions about their insurance policies. Don’t leave your community vulnerable—contact Navigator Risk for more information and to safeguard your association against unforeseen risks.

Where Cost Cutting Can Hurt Your Organization

Organizations have a lot of expenses, power, rent, utilities, salaries, and insurance coverage to protect themselves from risk. The bigger the organization the more these expenses can be.

Cutting items from your expenses like building maintenance, yearly audits of major electrical and plumbing systems, and working with a risk management team to improve.

Contact Your Risk Specialist for More Information