DEDUCTIBLE RESOLUTIONS
Deductible Resolutions:
Are You On The Hook?
As most condo owners are aware, their condo associations are responsible for insuring the condo’ s buildings, including the individual units, up to the original builder’ s grade. Almost all condo association policies have property deductibles. If your condo association has recently passed a deductible resolution, you may now be on the hook for some, if not all of this deductible unless your current HO6 policy provides adequate coverage. Therefore, it is important that you contact your personal lines carrier or agent to establish how this loss is handled on your individual HO6 policies in order to be fully protected.
Ask your carrier or agent the following question: How much coverage do I have towards my condo association’ s deductible? If the amount of coverage is less than the deductible, find out how you can increase the coverage to the full amount of the deductible. Asking the following questions will aid you in this discussion:
1) Is the condo association deductible covered under the loss assessment portion of my HO6 endorsement?
a) If so, is it adequate enough to cover the full deductible?
b) If not, can I increase the loss assessment portion to the full amount of the condo association’ s deductible?
2) Is the condo association deductible covered under my HO6 policy’ s Coverage A( dwelling), Coverage C( contents) or combination of the two?
a) If so, is it adequate enough to cover the full deductible?
b) If not, how much must I increase the coverage amount( s) to meet the full amount of the deductible?
HO6 carriers are not uniform in their coverage of condo association deductibles, so this needs to be addressed with your individual carrier to protect you from significant loss. Consider how two personal lines companies that JGS works with on HO6 policies deal with this issue.
Travelers offers $ 1,000 toward the condo association deductible under the loss assessment portion of its HO6 policy. This amount can be increased up to $ 50,000 through higher premiums. Franklin Mutual Insurance( FMI), on the other hand, provides ten percent of the total Coverage A( dwelling) amount and the Coverage C( contents) amount towards the condo association deductible. For example, if your Coverage A and Coverage C amounts totaled $ 100,000, FMI would provide $ 10,000 in coverage towards your condo association’ s deductible.
Protection against a deductible resolution starts with telling your carrier or personal lines agent your condo association has adopted such a resolution and for what amount. Then, work with your carrier or agent to endorse the policy so it does provide coverage for the non-recoverable condo association deductible. Ask where this is addressed in the policy or have this coverage documented in writing.
Finally, most condo association governing documents and bylaws require that you have an HO6 policy with adequate coverage. Therefore, it is recommended that you have your carrier or agent send a copy of your certificate of insurance to your condo manager’ s office to keep on file. +
BERNIE COSENTINO VICE PRESIDENT, JGS INSURANCE
Bernie Cosentino is celebrating his 33rd year in the insurance industry. Born, bred and educated in NJ he is a proud father to his adult children Joseph and Maria. Bernie is currently in his 17th year at JGS Insurance as A Vice President and broker / producer diligently pursuing the most competitive and comprehensive insurance program to a wide range of customer base.
6 | SPRING 2017