Before choosing an insurance renewal proposal, a board should understand what coverage is changing and what the association would need to pay after a loss. Hector Medina of The Loomis Company shared six practical questions to help South Florida condominium and HOA boards review their options with their insurance professional.
Compare coverage with the expiring policies
Does the renewal offer apples-to-apples coverage? Ask for a comparison with the expiring policies that identifies changes in coverage, limits, deductibles, and policy endorsements. Hector highlights assault and battery or firearms exclusions and sublimits as examples to review. A sublimit caps payment for a particular type of loss, even when the policy has a higher overall limit.
Request a list of significant exclusions
Ask your insurance professional for a written list of the significant exclusions in each recommended renewal proposal, including exclusions that are already in place. Have them explain how those exclusions could affect your association and whether options are available to address the risks. This helps the board understand what each proposal leaves uncovered.
Confirm the insurer status and guaranty protection
Ask whether each proposed insurer is admitted in Florida or is an excess and surplus lines insurer. Surplus lines policies do not carry Florida Insurance Guaranty Association (FIGA) protection if the insurer becomes insolvent. Where FIGA protection applies, covered claims remain subject to eligibility rules and statutory limits. Ask your insurance professional to explain what that distinction means for the policies being recommended.1,2
Understand how the wind deductible applies
For the proposed property coverage, ask whether the wind or hurricane deductible applies per occurrence or on a calendar-year basis. Confirm which events trigger each deductible and ask for an example using the association's insured values. If more than one storm causes covered damage in the same year, how would the deductible apply to each claim? Review the actual policy wording with your insurance professional.3
Discuss improvements that could affect pricing
Tell your insurance professional about completed or planned improvements, such as new roofs or electrical panels. Ask whether the work could affect renewal pricing or available terms, when an insurer would recognize it, and what documentation is needed. A project may support a more favorable review, but any premium reduction depends on the insurer and the association's circumstances.
Ask about options to address coverage gaps
Ask whether additional coverage or policy changes are recommended to address gaps and reduce the chance of an uninsured loss. For each recommendation, request a clear explanation of the risk it addresses, the cost, and any remaining exclusions or limits. This gives the board a basis for deciding which options to pursue.
Bring these questions to the renewal discussion and retain the insurance professional's written responses with the proposals. Management can help organize policy records and improvement documentation so the board has the information it needs for that review.
Thank you to Hector Medina and The Loomis Company for contributing these practical considerations.
For help coordinating your association's records, projects, and board communication, schedule a consultation with Precision Property Management.
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