Thanks to Jeff Grosser

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How do we determine how much insurance to carry?

What are the standard elements of a building insurance policy?

How do I know my insurance company is any good?

How do I find a good insurance broker?

My building went condo in the early 1970s. Is there any need to update the building’s bylaws?

When price shopping for insurance, what considerations should a condo have?

Are there improvements that a condo can make to its premises to reduce insurance costs?

What kinds of problems are not typically covered by building insurance?

If a building wants to change insurance companies because a different one offers a better rate, what are the complications?

Are there different issues if a condo has a lot of rental units?

Who are the contributors to this FAQ?

The insurance broker and carrier will advise you. They use specialized software to determine the replacement value of your building. Among the items taken into account are the type of construction and the cost of rebuilding. The insurer would also factor in items that would not have to be replaced, such as property and the building foundation. (JG)

• Property coverage--Protects against the loss of physical property or the loss of its income producing abilities.
• General liability--Protects the building from a large number of liability exposures.
• Employee dishonesty coverage--Protects unit owners from dishonest trustees and building managers.
• Fiduciary coverage liability--Protects trustees from being sued.
• Umbrella liablity—-Additional liability coverage (usually in $1 million increments), above that provided by general liability coverage.
• Workmen’s compensation--Provides protection in the event someone working on your site is injured. (JG)

AM Best rates financial strengths and management capabilities of insurance companies. (JG)

To find a good broker, speak with the lawyer for your condo association or ask trustees of other condo associations for recommendations. Also, ask the lawyer for your condo association. The Community Associations Institute provides additional information on its website, CAI Online (JG)

It would be a good idea to consult an attorney. Older condo documents sometimes do not clearly state what is the association’s responsibility and what is the unit owner’s responsibility. This could cause problems for both the building and unit owner when filing a claim. (JG)

There are only a few companies that insure buildings and condo associations. Your broker will provide you with costs from more than one company. Also, given that condo insurance can be costly, you should consider visiting a second broker to compare prices. (JG)

There are many things a condo association can do to reduce insurance costs. For instance, requiring unit owners to put in burst proof hoses, replacing your roof, waterproofing your basement, and providing improved fire protection have a positive effect from an underwriting standpoint. Your insurance broker will be able to make specific recommendations. (JG)

Most insurance policies do not automatically cover flood, earthquake, nuclear war, and terrorism. In some cases, you may be required under law to carry flood insurance. (JG)

The main complication is that if you cancel a policy, you may be subject to a cancellation fee. (JG)

Each insurance company has its own underwriting guidelines. The costs of insurance tend to be highter for buildings with more than 50 percent rental units.

(JG) Jeff Grosser, Rodman Insurance, Inc., jgrosser@rodmanins.com