Amanda Shultze, New Business Underwriter discusses the importance of Loss Recommendations.
Periodically to determine whether there are any exposures that can lead to a loss and almost always when a community association changes to a new insurance company, a loss control inspection of the premises will be conducted. Some examples of what the insurance company is looking for include uneven sidewalks, elevators that don’t stop level, outdated electrical panels and life safety such as emergency lights and smoke detectors.
When the insurance company discovers something they feel to be an exposure they send the insured what are called loss control recommendations. Though they use the term recommendations, generally, they are requirements. Depending on how critical the recommendation is, determines how long the insurance company will give the insured to comply.
For example if it’s something as simple as scraping and painting a hallway that had water damage but was repaired, the insurance company may give the entire term of the policy to comply. If it’s something that they feel may result in a claim, like faulty electric, the insurance company may choose to issue notice of cancellation immediately. Some associations find these inspections too onerous because they can result in the association spending money to comply with the recommendation, but at the end of the day, these recommendations will make the property safer, which in the long run will result in lesser claims and lower insurance premiums.
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