As insurance costs continue to increase, communities are slowly recognizing they need to change or pay the cost.
Insurance offers protection against unexpected costs arising from accidents and unforeseen events. Some communities have chosen to capitalize on insurance to avoid maintaining their properties and leading to growing insurance payouts. Stricter underwriting practices ensure these higher costs are now being paid.
When your corporation obtains insurance, they work through an insurance company. When a claim is made it goes through your insurance company but is paid by another company that has agreed to underwrite the risk. Increasingly, one company is no longer prepared to underwrite risk for a high-rise building so numerous companies agree to share in the risk. These companies are taking greater efforts to ensure your community is actively working to reduce claims so that risk remains manageable.
Communities will likely be more successful at obtaining insurance and keeping costs down if they show underwriters they are effectively managing risk and mitigating losses. This may require a change in culture.
The role of underwriter is to understand the risk being accepted by their company and to maintain a sustainable balance. Their increased scrutiny of condo buildings is because risk is increasing.
Obtaining insurance while minimizing premiums and deductibles depend on convincing an underwriter that your community is a good risk. They want to know how risk is being managed. Water damage prevention is important. Repairing known problems and installing systems to identify problems sooner thus reducing damage help to reduce risk, cost and claim volume.
General maintenance and housekeeping are important. An underwriter noticing unnecessary boxes, paper and clutter in an office, storage space or electrical room sees increased risk.
Communities that develop a culture of reducing risk and accepting responsibility are safer, cleaner, healthier and less expensive to maintain.
- Keep areas clean and clutter free
- Initiate proactive measures such as plumbing audits and water detection systems to prevent water leaks and related “accidents”
- Manage waste to avoid visible problems such as odour, vermin and pests
- When pests, vermin and odour become a problem take immediate action
- Eliminate hazards to reduce chances of a claim
An underwriter can be made more confident your community is lower risk by being made aware of improvements and the state of your reserve fund.