Condominium
associations are hampered by the cost of insurance. It is important that the
board of directors understand the basics of association insurance before they
evaluate the different bids. Below are the things that you need to know about
the coverage that a condominium association must have, as well as other
coverage that you should consider.
Know the
State Law for Minimum Association
Insurance Coverage
The first
thing that a condominium association should do is to check the state law
regarding insurance minimums for condos. In Florida for instance, condominiums
fall under the section 718 of the state statues. It overrides most of the
authority given to condominium associations, and must insure the property based
on its value that is appraised every 36 months. It is a replacement cost
appraisal, and not a market value appraisal.
Read the
Condo Association Governing Documents
Aside
from the state’s statute, you should also consider your condo association
government documents. This will ensure that the association insurance coverage
is compliant with the documents. The requirements also serve as a minimum
standard for the insurance. When talking to a broker, it is important to bring
your governing documents so that the broker will understand what the association insurance needs to cover.
Brokers
often read the governing documents to find out what the association insurance will
cover. There are instances in which insurance covers basic carpeting and
cabinetry, but will not cover when people make the unit on their own. The
broker will ensure that the board understands the types of insurance they need,
and what coverage is adequate. The broker will break down the requirements of
the insurance coverage so that they fully comprehend the insurance. Condo
associations require special insurance, and a professional insurance agent who
is familiar with condo association
insurance will be able to help the board through the entire process.
Determine
what the Association Owns
After
looking at the statute and governing documents, the next step is to find out
what the association owns, as well as what it is responsible for. A
developer-controlled association requires a different insurance compared to an
association controlled by the unit owners. A developer-controlled association
requires a policy that is property driver instead of liability driven.
Amount of
Property Coverage Needed
When
buying property insurance, it is important to find the right amount of
coverage. However determining the amount can be hard. One should determine how
much it would cost to replace the building in case it was destroyed by fire. One
way to get a replacement cost appraisal is by consulting an architect or a
contractor.
These are
the things you need to know about getting association insurance. One thing to keep in mind is that insurance companies
operate differently. It is important to compare several policies first before
finalizing your decision.
Contact Us :
Address : 816 A1A North , Suite
206 , Ponte Vedra Beach, Florida 32082
Email:
information@ciuins.com
Phone: (904) 285-7683
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