Condo Media - August 2011 - (Page 42)

INSURANCE by Maria Benway and Brendon Kilcoyne Disaster Planning Saving Time, Money and Property t’s 3:00 a.m. and you wake up to the shrill sound of your cell phone ringing. You answer it only to hear one of your unit owners tell you in a panicky voice that she woke up with water dripping on her face. She barely escaped in time to avoid the plaster from hitting her as the ceiling collapsed. You ask what happened and she tells you a pipe froze and burst in her neighbor’s unit upstairs and now the water is not dripping … it’s gushing … into her condo. What do you do? Who do you call at that hour of the morning? Whether you are an association manager or a condominium owner, most of us know someone who has experienced this kind of property damage. Whether it is the result of an accident or act of God, there is no way to “disaster proof” a building. When managing property, it’s a matter of “when” not “if” disasters will occur. You can’t prevent them, but you can prepare so that you know what to do, who to call and what the outcome will likely be. The terrorist attacks on 9/11 prompted companies and individuals alike to take stock of their own disaster preparedness. The last few years have seen a steady increase in the number of association management companies seeking disaster preparedness seminars to assist them in their planning. Are you prepared? Does your building leak and get ground water when it rains? Once you have determined what your building is more at risk for, you want to make sure that you take preventative measures to avoid further damage from occurring. If your building gets water in the basement, you want to look into getting a sump pump. A sump pump is usually an electric pump that is placed in the basement, and used to pump water from the basement to the outside. Sometimes sump pumps drain the water into the drainage pipe system, and sometimes they simply pump the water outdoors. Make sure you contact your insurance professional to add a sump pump endorsement, otherwise you may not be covered if your sump pump fails. This coverage is called “backup of sewers and drains.” Everyone is in a flood zone, but there are different levels of risk associated with each. If you are in a high risk area, your mortgage company generally requires the flood coverage from you. You don’t have to live near water to be flooded. Approximately 25 percent of all flood insurance claims come from “low-risk” areas. Floods are commonly caused by storms, melting snow, and dam or levee failure. Another preventative measure that you can take is installing a French drain, which is basically a ditch lined with rocks or gravel that helps drain water away from an area. French drains are generally used in gardening or to protect the foundation of a house or other structure from ground and surface water. However, they also may be used as a backup for retaining walls or to drain water away from a septic tank. Fire damage is harder to prevent, but there are steps that you can take to ensure that condominium owners are taking the right precautions. Make sure owners are aware of the smoking, candle burning and space heater policies. Association managers should take all the necessary safety measures. I Insurance Coverage and Premium Contacting the association’s insurance agent to discuss your disaster plan can help with your premium. There are many factors that can negatively or positively affect your insurance premium; they include, but are not limited to: location, age of property, type of construction and claims history. Most of these factors are fixed, however, the claims history, which is a major premium factor, can be controlled to a certain extent. Developing a disaster plan for your community will not only better prepare you for an event, by decreasing the chance of claims headaches, but could also help save money. Though there are no defined discounts for completing a disaster restoration plan, many companies view these steps as acts of a good insured performing their due diligence. In some cases, insurance companies look at these types of factors when determining whether they can offer a more competitive rate package. In addition to possibly lowering initial premiums and costs, a disaster plan also can reduce the end amount of claims paid, by creating a faster restoration and rebuild process. In the event of a fire, the damage caused by the fire departments water Prevention and Preparedness Water damage and fire damage are the most common disasters in condominium association living. Every building is different and yours may be more at risk of experiencing one disaster over another. Are you in a flood zone? 42 CONDO MEDIA • AUGUST 2011

Table of Contents for the Digital Edition of Condo Media - August 2011

Condo Media - August 2011
From the CED’s Desk
Editorial Board
CAI News
CAI Regional News
Asked & Answered
Homeowner’s Corner
Smooth Operations
Vendor Spotlight
Industry Perspective
Advertisers Index
Classified Service Directory

Condo Media - August 2011