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Our insurance experts answer your most pressing questions.

Short, helpful videos created by our insurance experts with answers to your most pressing insurance questions.

Quick Tip: Commercial Umbrella Policies in the Hard Market

By Blog, Business Insurance, Business Protection, Quick Tips

Commercial Umbrella Policies are the insurance policies that have been the most affected by the hard market that we are currently facing. Eric explains more.

We are currently in a hard market, which means premiums are increasing and less coverage is being offered because less carriers are able or willing to provide quotes. The policy that has been taking the biggest hit is the Commercial Umbrella.

An Umbrella provides excess coverage over the General Liability, Directors & Officers Liability, Auto Liability, and Workers Compensation policies. The umbrella will kick in and provide coverage for anything over the occurrence limit on any of those policies, but it will not exceed the umbrella limit. Most Umbrellas maintained by condos or coops these days are written in Risk Purchasing Groups. In the 90’s, these programs were formed to provide higher limits and lower premiums for similar types of insureds. They are typically made up of multiple carriers to spread out the risk. Most insureds have been carrying $100M umbrella limits because it was the most cost-effective option when the policy was taken out. Unfortunately with the hard market, that is no longer the case and insureds are seeing lower umbrella limits for a higher premium than they were paying for their $100M limit. This is due to a number of factors but one of the larger factors is that jury awards are increasing because jurors are much more sympathetic than they used to be. As such insurance companies are seeing more and more lawsuits and judgments that are exceeding the $1M underlying limit and more claims are piercing the umbrella.

For this reason, these programs are looking to reduce their exposure while increasing their premium in some cases by as much as 400%! You need to decide what limit is most cost-effective for your association while still properly protecting your association as your renewal may contain quotes for half the expiring limit at a premium that is double the price. Sometimes the only option is to reduce coverage so that the premium is more affordable. Having amenities like a swimming pool or commercial occupants such as a daycare or house of worship will increase your exposure, so those associations may need higher umbrella limits.

For more information, reach out to us anytime.

new floor

Quick Tip: Explaining Recoverable Depreciation

By Blog, Claims, Quick Tips

Aging is a fact of life, and this applies to our insured property as well, as it typically loses value over time due to normal wear and tear. This change in value is referred to as depreciation.

For example, new flooring installed today will lessen in value as the years go on, and more than likely the cost to replace it in the future will be higher. The ability to recoup this amount is referred to as recoverable depreciation, or the holdback amount. Recoverable depreciation represents the difference between the replacement cost and the actual cash value of an insured item when damaged by a covered cause of loss.

When a policy includes Replacement Cost, the insurance company may holdback a percentage of a claim until work is completed. In order to have the holdback released after a claim payment, the insured will have to provide canceled checks and paid invoices to indicate that the replacement cost of the insured property was paid or repaired. Many carriers impose a time restriction on the amount of time allowed to present a claim for the recoverable depreciation, so be sure to confirm the details within your policy.

For more information, reach out to us anytime.

House being raised and put on stilts to avoid flooding

Quick Tip: Raising Your Home

By Personal Insurance, Personal Protection, Quick Tips

Justin explains the benefits of raising your home if you live in a high risk flood zone.

With rising tidal waters, you may consider raising your home if you are in a high-risk flood zone. One of the benefits of a raised home is lower flood insurance cost. The National Flood Program is looking at large increases at each renewal. Each year you could see 10-18% premium increases. This could play a big role in your decision to elevate your home.

Another benefit is protecting your personal property from future flooding. Although you may have insurance, when it comes to water damage in your home, some things are irreplaceable.

There are some downsides to elevating your home as well. One important concern is cost. Raising a home could be upwards of $100,000 and there could still be additional unforeseen costs on top of that. Another area for concern is the amount of stairs in order to access your first level.

If you are thinking about raising your home, the savings will often outweigh the cost. It is a good idea to speak with your insurance agent to find out how your insurance will be effected.

For more information, please contact Justin anytime.

home living space renovation

What Does “Additions and Alterations” Cover?

By Personal Protection, Quick Tips

Whether you live in a co-op or a condominium, you should maintain dwelling coverage.  This is also known as Improvements or Betterments or Additions and Alterations coverage. This is a very important coverage and could be the difference in how your unit is rebuilt after a loss.

Most co-op or condominium master policies will follow what the bylaws indicate. In many cases, the bylaws say the association is only responsible to replace what is original to the unit. If so, any upgrades you or any prior owner has made will now need to be insured by you. These upgrades may include a new kitchen, bathroom, flooring or fixtures. Some bylaws indicate that the association is only responsible for the structure and the bones of the building such as plumbing & electrical behind the walls.  This puts more of the responsibility on the owner.

Because the responsibility can vary from building to building, you should discuss what limit you need to be insured to value. Your unit is going to be one of your largest investments and it is important to make sure you are covered for the full replacement value.

For more information or to receive a competitive quote, please contact us.

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