Factors That Affect Insurance Prices And Qualification For Condo Association

Condo owners and homeowners have one thing similar: The shared areas of their property like building structures, shared utilities, common service or entertainment area, common hallways and driveways, etc. These jointly owned properties are subjected to property and casualty losses for which insurance is very vital for protection. As a result and other reasons, condominium and home associations are established to offer services in connection with these mutually owned areas. Amongst these services are risk management and insurance services.

While each unit owner is accountable for the property and liability losses that may arise inside their units, condominium and home associations are in charge of handling the common areas and for procuring insurance policies for the benefit of all participating members. For that reason, condo associations secure a master policy and list each unit owner as a loss payee and additional insured on the master policy, each owner with the same ratio of their ownership compared to the total. Unit owners pay monthly assessment fees to cover administrative and operational overheads of the association including premiums for the condo master insurance policy. Depending on the size of the association, a professional management company may be appointed to manage the association's actions, or some elected members of the association board of directors may run these daily activities.

Elements Impacting Insurance Rates For Condo Associations

The main factor that influences the price of property and casualty insurance rates is the description of the buildings associated with the association in terms of the number of units and the construction material utilized, and history of plumbing/ heating/ electrical updates are critically important in determining the insurance rates for the association's master policy.

Scope of services retained and managed by the association: Associations that own, manage or take care of businesses such as convenience store, athletic and enjoyment facilities and actions such as swimming pools, gymnastic conveniences, entertainment places and parks, etc. are more prone to lawsuit than smaller condominium associations that have different range of activities. Anytime these services/ facilities are provided, insurance companies will want to obtain more specifications about the security offered to protect members and other people from damages and harm. In larger associations, more risky routines may be offered, such as ice skating, basketball courts, and even diving. These activities and facilities can reach much higher risk levels when associations are involved in providing airport facilities, horse trail, bike trail, and stables that may be operated or maintained by the association, and for which the association will be accountable.

Other Coverages That Could Be Needed By Condo Associations

Workers compensation is a coverage that is mandatory if the association hires people to handle the affairs of the association. Depending on the size and scope of the activities assumed by the association workers comp coverage can range from clerical exposure to too much higher risks such as maintenance people or drivers.

Auto liability is also wanted in the event that the association possesses their own business vehicles such as service/ maintenance vehicles, snow plowing trucks, etc.

Umbrella, or excess liability coverage is vital for all condominium associations, mainly for medium to larger size condominium association where losses resulted from lawsuits against condominium association can be sizable. Umbrella will at the same time raise the liability limits on all underlining general liability, auto liability, workers compensation to much higher limits (ie $2 or even $5 million, each occurrence).