Shopping for insurance for your co-op or condo can be pretty confusion. What type of insurance do you buy? How often should you shop for insurance? How much insurance is “enough”? Our President, Edward Mackoul, wrote The Do’s And Don’ts When Shopping For Your Insurance in the Mann Report to help you with the confusing process of shopping for insurance.
What Are Some of the Top Do’s and Don’ts When Shopping for Insurance?
Do shop your insurance, but not more often than every three years unless you are facing a large rate increase (generally 10% or more) or if your current insurance company is canceling your insurance.
Don’t shop your insurance every year. There are generally a dozen carriers that specialize in co-op and condominium insurance. Different carriers have different niches, and depending on the size of your building, what updates have been completed and the life safety the building does or does not contain – such as emergency lights and illuminated exit signs – there may only be 3 to 4 carriers willing to provide you with a quote.
After seeing submissions consecutive years without getting a binding order or binding the insurance one year only to lose it the next year, carriers and insurance brokers eventually will stop providing quotes.
Do shop 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. A specialist will know the differences between Directors & Officers Liability policies and what coverages you should and should not be paying extra for. If you are going to go out to multiple insurance brokers, don’t go to ten different ones.
Do go to the incumbent and one or two others. Generally an insurance broker who specializes in co-op and condominium insurance will access most, if not all of the markets that specialize in this area as well. 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.
Don’t shop your insurance with one of the board member’s cousin’s sons or the guy down the street just because they are licensed to sell insurance, unless one of their niches is insuring real estate. You may be doing them a favor, but you won’t be doing the board and shareholders/unit owners a favor.