Christian Vanasse

By Christian Vanasse

September 14, 2021

Business

Insurance guide for condo association managers

Article revised on 14 September 2021

Managing a condo association comes with a lot of responsibilities to ensure the peace of mind of co-owners. One important task is handling insurance.

Some of the responsibilities as a condo association manager are the following:

  • Collecting the fees for common expenses
  • Managing the reserve or contingency fund necessary to cover foreseeable and unforeseeable future work on the building over a period of 30 years
  • Keeping the building in good condition, to safeguard the assets of all the co-owners
  • Overseeing maintenance of the common areas
  • Protecting the rights inherent to co-ownership and the building

You must also manage the condominium, i.e. negotiate condominium insurance against fire, theft, vandalism, water damage, including selecting the appropriate coverage.

Get adequate coverage

Insurance amounts—and the resulting premiums—are based on the notion of risk. How likely is it that a loss will occur? And if it does, what will the damage cost?To help your insurer offer you the best coverage at the right price, you may be asked to provide the following documents:

  • Photos of the building
  • A recent inspection report
  • A recent appraisal of the building (between 3 and 5 years old) including its reconstruction cost
  • A copy of the declaration of co-ownership
  • A list of the measures taken to minimize water damage, prevent fires, etc.

You will also have to provide information concerning the rules for the common areas, parking lot, swimming pool or community room.

When it comes to water damage coverage, you will need to be mindful and pay attention to the following factors in the contract you’re offered:

  • The types of water damage covered: gutter overflow, air conditioning system overflow, appliance overflow, pool overflow, infiltration, sewer backup, flooding, etc.
  • The coverage amounts available for each type of damage
  • The deductibles applicable for each type of damage

The amount of condominium insurance will then be determined. It must be enough to cover the cost of completely rebuilding the building in the event of a major loss.

Take measures to prevent losses

1. Ensure proper maintenance of the building

Not only is a well-maintained building less costly to insure, it may spare you certain difficulties in the event of a claim.

Establish a maintenance schedule that includes the following:

  • Replacing water heaters, smoke detectors and fire extinguishers Check the recommendations of your municipality or province regarding the replacement of this equipment.
  • Cleaning gutters (every year, in the spring and fall)
  • Cleaning drains, non-return valves and other drainage systems (as required)
  • Inspecting emergency exits and garage doors to ensure proper functioning (once a year)
  • Removing snow from the roof (as required)
  • Chimney cleaning (once a year)
  • Replacing the roof (have the roof inspected every twenty years)

Keep a maintenance logbook that contains the history of all work done on the building. Call in an appraiser to set it up and estimate costs.

Have maintenance contracts for certain items:

  • Automatic fire suppression systems (sprinklers) and fire hydrants, if any
  • Snow removal from sidewalks and parking areas
  • Swimming pool

2. Keep condo owners in the loop

Keep co-owners informed about the safety measures to avoid a loss that could affect more than one person, such as fire or water damage.

Make sure the maintenance staff 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.

Tell some of the condo owners where the water supply valve is located, especially in case of a breakage during the night.

Distribute condominium rules to all owners. When rules change, post them in the elevators and common areas.

Make condominium safety everyone’s business: encourage people to intervene if they witness risky behaviour.

Take advantage of the annual meeting of co-owners to remind everyone of the basic safety rules for the well-being and peace of mind of all, including:

  • Installing smoke detectors near bedrooms, making sure they work every six months and replacing them every 10 years
  • Keeping a working fire extinguisher in the kitchen
  • Using safe cooking appliances, such as a thermostat-controlled deep fryer
  • Adopting safety standards for barbecue grills
  • Knowing what measures to take in case of extended absence

3. Be prepared for the unexpected

With the right response plan, you’ll be ready to face the music in the event of a loss, and keep maintenance staff in the know.

Get a group of co-owners together who can respond immediately. You don’t have to do everything yourself.

Make sure you are able to enter units that sustain damage if their owners are away.

Keep an up-to-date list of every owner’s contact information. This will allow you to:

  • Quickly notify the owners of affected units
  • Avoid delays in processing the insurance claim

Keep a recent copy of the Declaration of Co-ownership handy. The information it contains is essential to the processing of the insurance claim.

 

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