Community Communication Corner
by Bob Gourley, MyEZCondo Founder, Member of CAI CT Board of Directors

Making Insurance a "Premium" Story

The Sky is falling! The Sky is falling! "Chicken Little" may have gotten it right this past year. Hurricanes, floods, tornadoes and more were unleashed in record numbers across the country. While the headlines addressed the devastation and human loss, there is another story that needs to be told. As insurers continue to make payment on the mountain of claims, rates are routinely rising all across the country. Your community may have been spared from Mother Nature's wrath but there is no escaping the storm of increased premiums and the sea of discontent that arises when community members are asked to pay their share in the form of increased common fees to cover higher premiums.

How can you soften the blow? Tell your members how insurance works in their community. Work with your agent or insurer to get out the information that your community members need to know. Special notices as well as your community newsletter are great ways to tell the story of how important insurance is and how the events in the headlines are effecting their insurance premiums.

The general assumption most people make about insurance is that as long as they don't make a claim, their rates will stay low. While there may be some truth to that ideology, the shear magnitude of loss this past year needs to be spread around if we expect insurers to be in business in the future. Insurance analysts study trends in claims, risk factors and more to determine their rates. Can you imagine constructing a model that would include the likes of the disasters we have seen this past year?

Condominium communities are not the only insurance clients burdened with these increases. Rate increases are not limited to the Gulf Coast and other areas so badly damaged. Many shoreline communities are finding it difficult to find an insurance vendor who can even write their business, let alone provide for competitive bids. You have undoubtedly heard the stories of communities whose rates have more than doubled from last year.

In order to tell the story to your community members, you need to arm yourself with the facts. The Insurance Information Institute (I.I.I.) is a great place to start. For 40 years, the I.I.I. has provided definitive insurance information and analysis. They have an excellent website at www.iii.org. The site also features a homeowner's section with specific concerns for owners of condominiums.

A more specific website for you to consider is www.disasterinformation.org where you can track insurance-related issues as they pertain to national disasters. This website is chock-full of useful information for disaster victims and those interested in keeping up on what restorations are being made. Of course, the Federal Emergency Management Agency (FEMA) maintains an updated website at www.fema.gov.

Once you have a basic understanding of what is happening in the world of insurance for condominiums, you can relate that information to your community. It is easier to explain your community's situation when the bigger picture is taken into consideration. It is also a good idea to let homeowners know how their insurance is purchased, how often policies are reviewed, and any changes that are made to the coverage. This is also a great opportunity to explain the difference between homeowners insurance and insurance that the association provides.

Presented in the right context, an open discussion about insurance for the community will help dispel any misgivings that residents may have about paying increased premiums. They may not be happy about paying more, but they will respect the reasons why and appreciate your efforts at keeping them informed. Stake your claim and make insurance a "premium" story for your community. Trust me, it's the best policy!

This article originally appeared in CondoManagement and is being used with their permission.

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