The insurance renewal process has become increasingly challenging for many community associations. Due to the hard market and the rise in strict underwriting guidelines, it is more important than ever for boards to prepare for a renewal process well in advance of the policy expiration date.
We highly recommend that the board consider appointing an insurance committee to manage the renewal process. This committee should be made up of one or more unit owners who will work closely with the association’s insurance agent in the months preceding the renewal. Some quotes arrive very close to the renewal date, and sometimes the board must make big decisions within a small window of time. There are several items to prepare and consider before the board receives the renewal quotes. The insurance committee can alleviate a last-minute frenzy by working with the agent to prepare for potential changes including deductible and coverage changes, as well as premium increases.
By communicating with the association’s agent throughout the renewal process, the insurance committee can help give the board time to digest potentially big changes or premium increases. Additionally, this committee can help educate and prepare unit owners for changes that affect them. Coverage changes may affect how unit owners need to set up their own personal policies (HO6). For example, consider what unit owners may need to do if the association’s deductible increases, if earthquake coverage is reduced or removed, or if the unit coverage changes. Unit owners will need to be informed of upcoming changes as soon as possible so they have time to make appropriate adjustments to their own policies.
Help Your Association Budget for Insurance Premiums
