Risk Assessment and Insurance Claims

June 2019

There is no way to avoid risk.  Our choices do allow us to minimize or control it.  This applies equally to home ownership, in all its forms, and renting.

Every condo community has and seeks to manage risk.  People slip on floors or trip over potholes.  Water enters condo suites from common areas; roof, walls or leaking pipes.  Condo corporations maintain insurance to protect owners from liability which may result from claims arising from this risk that may be better described as accidents.  As claims increase, the cost of insurance also increases.

At some point the cost of insurance becomes a major expenditure to the corporation.  When that time comes the corporation has two choices.  It can pay the cost of insurance and adjust condo fees accordingly.  Alternately, the corporation can seek to reduce insurance costs.

Insurance costs can immediately be reduced by eliminating coverage and accepting the risks of doing so.  Another approach is to document the cause of insurance claims and eliminate these risks.  Each time there is an insurance claim, understand the cause of the claim and eliminate the problem so no further claims can result from that source.  Doing this on a regular and ongoing basis helps keep insurance claims to a minimum likely reducing both insurance deductible and coverage amounts.

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