Insurance guide for condominium syndicate managers
Article revised on 6 December 2018
A condominium syndicate manager’s role includes many responsibilities. One of them involves handling insurance matters. It goes beyond selecting adequate condominium syndicate insurance coverage.
The implementation of loss prevention measures and a loss preparedness process is also very important. This little guide that we have prepared can help you sort it all out!
1. Get adequate condominium syndicate insurance
When selecting coverage, pay close attention to the following elements:
Degree of analysis at the time of the insurance quote
The insurance representative has to obtain various pieces of information in order to be able to analyze your insurance needs and recommend adequate coverage. With your cooperation at this stage, the insurance representative can give you good advice! Types of information that might be requested:
- Photos of the building or a recent inspection report
- An appraisal of the building
- A copy of the declaration of co-ownership
- Information concerning management of the common areas, parking lot, swimming pool or community room
- Information concerning the measures taken to minimize water damage.
Insurance amount for the building
This amount should be sufficient to cover the cost of rebuilding in the event of a major loss.
To determine this amount, it is recommended to obtain a recent professional appraisal of the building that includes the reconstruction cost. The building should be appraised every three to five years.
Water damage coverage
To get the best coverage against this type of loss, you ideally should request a quote from several insurers and compare their offers based on the following factors:
- The types of water damage covered
- The coverage amounts available for each type of damage
- The deductibles applicable for each type of damage (the portion of expenses that the syndicate will have to pay in the event of a claim).
Don’t hesitate to ask insurance representatives for advice. They can help you sort it all out!
2. Take measures to prevent losses
Inform all condo owners of effective ways of preventing losses
At the time of the annual general meeting of the co-owners, you can provide reminders or propose the establishment of by-laws aimed at preventing loss. For example…
- Designate spaces for smokers and install fire-safe ashtrays there.
- Reiterate the importance of:
- Installing smoke detectors near bedrooms
- Checking the batteries every six months
- Replacing your detectors every 10 years.
- Recommend the installation of a functioning fire extinguisher in the kitchen.
- Recommend the use of a thermostat-controlled deep fryer.
- Propose the adoption of safety standards for barbecues.
- Reiterate the measures to be taken in case of extended absence.
Ensure proper maintenance of the building
Maintenance is an essential aspect of co-ownership. In the eyes of the law, the syndicate is responsible for maintaining the condo owners’ assets. Concretely, the advantages are significant: Not only is a well maintained building less costly to insure, it may spare you certain difficulties in the event of a claim.
3 ways to ensure impeccable building maintenance:
1. Establish a maintenance schedule for planning tasks, such as:
- Replacement of water heaters, smoke detectors and fire extinguishers (to be replaced every 10 years)
- Clearing of gutters (every year, in the spring and fall)
- Cleaning of drains, non-return valves and other drainage systems (as required)
- Inspection of emergency exits and garage doors to ensure proper functioning (once a year)
- Snow removal from the roof (as required)
- Chimney cleaning (once a year)
- Replacement of the roof (Have the roof inspected once it’s 20 years old).
2. Keep a maintenance logbook that contains the history of all work done on the building.
3. Enter into maintenance contracts for particular items, such as:
- Automatic fire suppression systems (sprinklers) and fire hydrants, if any
- Snow removal from sidewalks and parking areas
- The swimming pool.
3. Be prepared to react in the event of a loss
Proper planning is crucial in emergency situations. Here are some measures you can take, to be prepared to face the music.
Maintain an adequate contingency fund
According to com, about 40% of condominium syndicates admit that their contingency fund is insufficient to cover the cost of the work that needs to be carried out on the common areas of the building.
A contingency fund should provide the resources necessary to cover the cost of work that has to be done on the building over a 30-year period, whether or not the work is foreseeable. It is recommended to get the help of an appraiser to establish a maintenance schedule and determine the resources necessary.
Ensure awareness of the location of the main water supply valve
Make sure the maintenance staff or at least one of the condo owners knows where to find the building’s main water supply valve. That way, they will be able to minimize the damage if there’s an issue with a plumbing fixture.
Have the condo owners’ up-to-date contact information
In the event of a loss, that information will help you react quickly, even if the condo owners affected are not around. For example, you will be able to:
- Quickly notify the owners of the units affected
- Prevent additional delays in processing the insurance claim
- More easily access the units affected, to limit the damage.
Keep a recent copy of the declaration of co-ownership handy
In the event of a loss, the information contained in the declaration is essential to processing of the condominium syndicate’s insurance claim. Indeed, the insurer will have to peruse that document before being able to process the claim.
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