Lisa Terrasi, Director of Marketing, discusses how frequently changing insurance providers can result in a negative impact for community associations.
Every community association wants to pay the lowest premium possible, which is fine, as long as the coverage is comprehensive. In an attempt to do so, there are lots of associations which remarket their insurance every year. This does not benefit the association in the long run.
There are a limited number of insurance companies and programs that specialize in insurance for community associations, and if they receive the same submission each year and don’t receive a binding order, they will eventually decline to provide a quote. The same holds true if they bind one year only to lose the account the next.
In both of these instances, an insurance company knows that the insurance is being remarketed every year and the chances of them renewing the account after one year drop. In order for an insurance company to make money, they typically need to insure an association for at least three years.
We generally suggest not to remarket your insurance more than every 3-4 years unless
- you have received notice that your premium will be increasing by 10% or more or
- your coverage is being cancelled by the insurance company.
If you are going to shop every year, then don’t go to multiple insurance brokers. A broker that specializes in community association insurance can access most of the major insurance companies and programs. At least then, the companies and programs won’t be seeing submissions from several different brokers. The more brokers working on an account, the less chance they have of writing it. You want them to be there when you need them.
For more information, please contact us.