November 10, 2020 by Adam Malik
Clients don’t always know the process when they have to report a condo insurance claim, and a number of property and casualty insurance professionals believe education of condo managers and boards is key to turning around the hard market in condo insurance.
“I do honestly believe we can make significant [premium] savings by educating property managers and condominium boards [on] the importance of working with their insurer when a loss occurs,” said John Slattery, executive general adjuster at Sedgwick during Canadian Underwriter’s webinar, Build up your Condo Business: How to Succeed in Today’s Condo Insurance Market.
For example, when a flooding incident occurs, the first call may be to a plumber to shut the water off. But the next one should be to the broker, Slattery said, because they would have a list of preferred contractors who specialize in these particular sorts of claims.
The broker’s knowledge is invaluable because the property manager may not know, for example, that a condo contractor is different from a home contractor, Slattery suggested. The condo contractor would have the proper experience, licencing, and tools to deal with a condo loss. “And there’s a mandate on their part [as a condo contractor] to try and salvage as much as possible, versus going in and ripping out and removing everything,” he said.
The same is true for adjusters, Slattery added. The right professional who understands the nuances of a condo property needs to be assigned.
“For example, you’re dealing not only with the property manager, but tenants, unit owners, contractors that have been brought in by the other unit owners,” he said. “So there’s a lot of moving parts going on there.”
Furthermore, it’s important an adjuster gets out there quickly to control costs. A delay in the property manager getting in touch with their broker can mean more bad news for the condo corporation.
“I often tell my co-workers that when you have a loss [in] a condo, and specifically a large one, it’s like a mini-Cat. You need to treat it like that,” Slattery said.
Panellist Jeff Rodin, president and CEO of Condominium Insurance Solutions, said he did about three educational sessions a month with property management companies pre-COVID. Getting in front of them to provide expertise on such things as appraisals and contracting is essential, he said.
“We educate them on what needs to be [done], to have all the moving parts put in place, in order to properly insure the condo and mitigate from loss. But mostly it’s an educational seminar for the property manager, to the board of directors, on how to mitigate losses.”
Condo unit holders are also in need of education, said panellist Lindsey Bellinger, assistant vice president of commercial lines underwriting at Aviva Canada.
“At the end of the day, the unit owners in these condominiums [are] a huge factor [in] some of the losses,” she said. “So there has to be just basic education for the unit owners as well.”
Feature image by iStock.com/fstop123