Speaking About Insurance Rates!

We all know that our Association insurance rates went up about 30% last year.

When I was given the responsibility for maintaining Association buildings and elevators last year, I knew nothing about them. I had a lot to learn - and even more remains to be learned.

A key thing I did learn: our buildings were in a higher risk category than their roofing justified. The good news is that we qualify for lower insurance rates when we renew in June - probably at least $100K. The bad news is that we didn't get the lower rates - about $250K less for last year - when we renewed last year in June.

Being responsive to our insurance company's requests and proactively using preventive maintenance were all that was needed to get our buildings put into a lower risk category.

This past November I learned that our insurance agent wanted to get a copy of our roof maintenance plan. I checked with our property manager and discovered we don't have one. I called our insurance agent to find out what kind of plan we need. He said we should talk to roofers and have them give us a quote for a maintenance plan. 

I started talking to roofers and sent a quote to our insurance agent to see if their proposal met insurance requirements for discounts. Soon after, one of our roofers, our insurance agent, and I had a 20 minute meeting to discuss what our roof maintenance plan needed to qualify us for better insurance rates.

It turned out that our roofs already qualified for better rates, but the description and age of the roofs were not correctly recorded by the insurance company. All that was required was documenting the type of roofs installed, when they were installed, and how much they cost. I was unable to find copies of old invoices, but I could get that information from the Palm Beach County Building Permits Department. I filed an information request, got the documents, and forwarded them to our insurance agent.

We are now in a lower risk category that makes us eligible for coverage by companies with stricter standards and lower rates. That means our planned insurance increase of 20% this June will probably be much lower. We might save $100K per year and we can document that we have more useful life in our roofs than our Reserve Studies say. That means our roof reserves are not as short on funds as we thought.

Continuing the approach of "saving money" by not spending it on roof maintenance, evading the insurance company's request (penny wise and pound foolish), and treating vendors as opponents instead of partners, we would never have known we already qualified for discounts.

Had this been documented a year ago, our insurance rates would not have increased at all last year according to our insurance agent.