Condo Media - September 2016 - 51

tion might want its policy to kick in
between 30 and 40 feet. Thirty feet
"isn't that far from the average," he
notes. "The savings closer to 40 feet
will be significant."
Snow insurance, he emphasizes, is
precisely that-it covers snow removal
costs, but it doesn't provide blanket
coverage for all weather-related budget
gaps. "You might have several ice
storms, requiring multiple de-icing
treatments. But if there is no snow
involved," Holmes notes, "the snow
insurance won't apply."
COVERAGE FOR CONTRACTORS
Holmes' company and others also offer snow insurance for snow removal
contractors, insuring them against
snowfall levels that are greater or
lower than they expect. Either could
affect contractors' income, depending
on how they structure their fees. A
contractor who charges per service
will have a banner year if snowfall is off
the charts but suffer in a winter with
minimal snow. A contractor offering a
fixed-fee contract will celebrate in lowsnow years but will take a serious hit if
forced to make 15 service calls rather
than the seven or eight the contract
anticipates. Like the insurance for associations, insurance for contractors is
based on a threshold. The further from
the threshold, the lower the premium.
Fixed-fee contractors would want to
insure against snowfall exceeding the
threshold, but fee-for-service contractors would want to insure against
snowfall levels below it.
A meteorologist by training, Holmes
has parlayed his knowledge of weather
into a market niche, specializing in
weather insurance for a variety of clients
and a variety of conditions. The sponsors of outdoor concerts, for example,
purchase insurance to cover excessive
rainfall that might force the cancellation
of an event or reduce the income from
it. "People don't like soggy hot dogs," he
notes, so they tend to purchase fewer
refreshments if it's raining heavily.

Holmes markets insurance to associations directly or through the insurance
agents representing them. He advises
boards and managers considering snow
coverage to begin by collecting detailed
information about average snowfall in
their area over the past 10 to 20 years.
"Don't guess how much insurance you
might need," he emphasizes. "Look at
the numbers. Then look at the association's budget during that time frame and
determine how often snow removal costs
exceeded the estimate." If snowfall levels
have been within the average in seven
of 10 years but exceptionally high or low
in three, the extreme high in those three
years would be a good benchmark to use
for the threshold, Holmes suggests.
But you don't want to set your threshold at the extreme, he emphasizes.
For example, Boston's 2014-2015
record-setting 110-inch snowfall was

about double the annual average, but it
was also "extraordinary," he notes, and
unlikely to be repeated. The threshold
should be somewhere between the average (55 inches) and the extreme-70
to 80 inches would be a "reasonable"
target, he suggests.
What associations should not do,
Holmes cautions, is base the current year's
snow removal budget on the amount
budgeted the previous year. As recent
experience has proven, when it comes to
predicting the weather or association costs
related to it, the past is not necessarily a
perfect predictor of the future.

n NENA GROSKIND IS PRESIDENT
OF ECONTENTPLUS, PROVIDING
EDITORIAL CONTENT FOR WEBSITES,
PRINT AND ELECTRONIC
NEWSLETTERS, AND MAGAZINES.

Realty & Property
Management, LLC

Since 1974

CREATING, MAINTAINING, & ENHANCING COMMUNITIES
Offices located in Boston, North Andover & Holbrook

857-239-8280 ext. 670
Stephen DiNocco, CMCA, AMS
Stephen@AffinityRealty.com

www.AffinityRealty.com

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