Playmor Post
August 2002
We have some good news and bad news for you.The good news is that our insurance agent, Paula Crowder of Snapp and Associates, was able to obtain property and general liability insurance coverage for Playmor.The bad news is our premium has increased to nearly 6 times the amount that it cost last year. Every possible carrier (over 20 companies) was asked for a bid. The Board of Directors selected the company that provided the required coverage at the least possible cost.
A number of factors precipitated this increase. Each factor individually would have caused some increase. When considered together, they greatly impacted the amount of our insurance premium.1. Everyone is familiar with the events of September 11 2001, but what most people don't realize is the billions of dollars the attacks cost the insurance and reinsurance companies. These costs are passed on to primary carriers who in turn pass them on to the consumer.2. Since September 11 the insurance companies have not realized their previous large profits in the stock market and, in some instances, they have lost money. Someone has to cover these losses.3. A number of multi-dwelling unit (apartment and condominium) carriers have either discontinued or placed a moratorium on writing any new coverage. This obviously decreases competition in the marketplace and has caused virtually all multi-dwelling premiums to increase significantly.4.
The largest single factor that caused our premium to increase is our loss rate for the last three years. The complex suffered only one liability loss, but it was a large one. Two years ago the Association was sued by a woman who suffered a broken ankle when she stepped off of a porch into the landscaping. Rather than litigating the case, Farmer's Insurance Company's in-house counsel elected to pay $227,000 to the plaintiff. The cost of our property losses in three years was only $30,000. The major problem rests in the number of claims filed during that time.1. The Association filed two claims.2. Two homeowners filed valid claims for water damage.3. Five other homeowner's insurance claims adjusters submitted claims for damage that was not covered under the master policy. Those claims were subsequently rejected. These five claims increased the total number of claims to nine, which greatly affects our perceived loss frequency rate.
When insurance underwriters rate a policy, they study the total number of claims filed, not just the number of claims paid. Unfortunately, in order to fund the additional insurance costs, the Board of Directors is forced to levy a special assessment of $374.00 per unit for fiscal year 2003. Each member must pay $374.00 to the HOA on or before June 1, 2003. You may choose any installment plan you wish as long as the total of $374 is received by the due date. Any unpaid balance will be subject to a late charge. We sincerely regret this action, but the Board had no alternative.