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Do’s and don’ts when remarketing your co-op and condominium insurance

By April 18, 2016April 15th, 2018Business Protection
Do's and don’ts when shopping co-op and condo community association insurance

You’re on the board of or manage a co-op or condominium association and want to make sure that you have the most comprehensive coverage available, at the lowest cost possible. But shopping for co-op and condominium insurance can get complicated because of the risks that confront community associations, especially in the New York or New Jersey.

Here are some do’s and don’ts to consider.

Co-op and Condominium Association Do’s

  • DO REMARKET your insurance, but not more often than every 3 years unless you are facing a large rate increase (generally 10% or more), or if your current insurance company is canceling your insurance. Insurance carriers will often decline to provide a quote if they see the same submission year in and year out and never get a bind order or if they bind the insurance one year only to lose it the next year. You want to them to be there when you need them.
  • DO REMARKET your insurance with an insurance broker who specializes in co-op and condominium insurance. You will generally end up paying lower insurance premiums and have the coverages you need. For example, a specialist in co-op and condominium insurance will know the differences between Directors & Officers Liability policies and what coverages you should and should not be paying extra for.
  • DO GET a full insurance proposal from all insurance brokers who provide a quote. A full proposal should include the insurance company name, coverage limits and definitions, recommendations to add coverage, increase coverage amounts and exact premiums. Make sure they provide a comparison between the expiring coverage and what they recommend.
  • DO PAY for the extras such as water back-up and building ordinance. Fire may be the main peril insured against, but there are other perils that you need to be aware of that are normally excluded unless bought back.

Co-op and Condominium Association Don’ts

  • DON’T REMARKET your insurance to every broker available. There are generally a dozen carriers or programs that specialize in co-op and condominium insurance. Different carriers have different guidelines, and based on the size of your building and other factors such as life safety features like emergency lights and illuminated exit signs, there may only be 3 to 4 carriers willing to provide you with a quote. Most brokers who specialize in co-op and condominium insurance will be able to access most, if not all, of the insurance carriers that specialize in this area. If you are going to seek out multiple insurance brokers, consider limiting it to the incumbent and two additional. Since most insurance companies will only provide the first broker who sends in a submission with a quote, it will not be beneficial to have ten brokers sending in submissions. Insurance companies don’t like to know that the same co-op or condominium has a dozen insurance brokers working seeking quotes. It just reduces their chance of writing the insurance and retaining it upon renewal. At the very least, an insurance company usually does not start making a profit until the third year of providing insurance, so their goal is to build a long term client.
  • DON’T REMARKET your insurance with one of the board member’s sons or your neighbor down the street just because they are licensed to sell insurance, unless one of their niches is insuring co-op’s or condominiums. You may be doing the board member or your neighbor a favor, but you won’t be doing your board or owners a favor because an agent who does not specialize in co-op or condo insurance may not know all of the issues that coops, condominiums, their boards and residents face. This could be an expensive mistake!
  • DON’T ACCEPT a one-page fax or e-mail proposal. One page cannot provide you with all of the information you need to compare quotes. It’s like going shopping and getting a receipt with only a total listed. How do you know what you purchased and how much it cost? Also, don’t accept anything that says “same as last year” without the actual terms and conditions. Your insurance broker should be transparent and go the extra step to provide you with a full insurance proposal.
  • DON’T SKIMP. Ask your insurance broker if there is anything missing from your co-op or condominium association insurance policy that they feel you should add. Get details on why they are making the recommendation and the additional cost involved. If you are dealing with a specialist in co-op and condominium insurance, there is a good chance you already have what you need.

Following these simple “Do’s” and “Don’ts” should help make your task easier, help you avoid pitfalls and maybe even save some money in the process. If you need a hand, we’re here to help. Real estate insurance is our passion. Happy Shopping!

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