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Improvements, Updates, and Renovations can Change Your Insurance
Our homeowner and condominium owner clients take great pride in their homes and communities. All over our region, they make investments in the beauty and livability of their respective homes. When you make a renovation or an update to your home, do you check with your insurance agent?
Improvements Can Lower Premiums – Making changes to your home that reduce the chances of damage and loss can change how much you pay in premiums. Your choice of roofing may lower the risk of wind damage. Updating electric may lower the chance of fire. Plumbing updates can work to prevent flooding. Many carriers offer discounts for security systems. These can all be factors for the rates you pay for insurance.
Increasing Your Home’s Value – If your home improvements have substantially raised the value of your home, it is prudent to have your insurance agent review your coverage. That new kitchen, new addition or wonderful home theater should be covered just like the older features of your home.
When reviewing your coverage, consider the difference in the cost of actually restoring your home may have gone up (see our blog Insurance and Replacement Cost) and your coverage should reflect that. Our team at O’Connor Insurance Agency recommends periodic review of your coverage so that you know your family will be made whole should there be a loss.
Your independent insurance agents at the O’Connor Insurance Agency are interested in helping you get the best value for the coverage you need. Please contact one of our independent insurance agents at 314-434-0038.
Are You Covered If a Drone Crashes On Your Property?
Your maintenance associate has a great idea. Instead of climbing up and down ladders to inspect the roof and gutters after a storm, they’ll use a drone to take high-definition video of the peaks, valleys, hips and flashing of the buildings in your community association.
On a bright day, the sound of the drone buzzes like a giant, furious wasp. It takes off and your team is on your way to getting all the roofs inspected in record time. Toward the end of the afternoon, the last building is being inspected – the clubhouse. All is well until an unexpected breeze throws the drone off-course and it crashes through the massive window that faces the lake.
Will this accident be covered by your insurance?
In most situations the answer is “no.” For insurance purposes, an accident with a drone is no different than an accident with an aircraft. Unless you have coverage specific for aviation, the damage would not be insured.
Drone Liabilities – As drones are being employed for inspections, monitoring and other tasks for community associations, boards will want to take into account the possible problems that can come into play using flying drones. The obvious are accidents with a drone, or accidents caused by a drone, but the potential for liability does not end there. Drones likely to be used by a community association will be recording images. Combining images, video and data that may be personally identifiable can raise privacy issues as well as privacy liability. Even as aviation-related damage and injuries may not be covered under common policies, any cyber-security or privacy liability coverage will not extend to drone use. Should you employ drones, checking to make sure your policy includes coverage for cyber security and privacy is a good idea.
If a homeowner has an accident with their drone, the community generally will not be liable unless the community is somehow negligent. A possible step to avoid the charge of negligence could be for communities to establish “no drone zones.” That said, the Federal Aviation Administration regards regulation of the skies their exclusive purview, so a community association may not be able to enforce such a restriction.
Like any new technology, there are risks that offset the benefits. Community association leaders should speak with their insurance and legal representatives to develop a drone use policy and secure coverage for drone use.
If you have questions about insurance and drones, please call your independent insurance agent here at the O’Connor Insurance Agency. Our number is 314-434-0038.
Improving Your Community? Make Sure Your Insurance Keeps Pace!
Repairs and updates to your community association facilities change the insurance needs for that association. Some improvements can save you premium dollars, while others might increase your need for liability or replacement.
Expanding your Board? Check your Directors and Officers Coverage – D&O insurance protects those community association volunteer leaders who serve as trustees or board members. If your community is growing, and you add new members, your coverage needs may change.
Updates and Upgrades to Existing Features Can Affect Premiums/Coverage Needs – Updating your community pool? Renovating the clubhouse? Changes to the structures can both increase the need of coverage and even lower premiums. As it is with homeowner’s or unit owner’s insurance, increasing the value of the property may increase the coverage needed. The good news is improvements that reduce the risk of damage, such as a new roof or updated wiring, may yield premium discounts. A community association should have a thorough review of the changes in the community with their insurance agent.
Liability Changes – A community is liable for events on the property. Any community association ought to have an umbrella policy that will cover the community should someone be injured or worse.
Adding features, such as a playground, walking paths, or even a fountain will likely change how much liability coverage you will need. As with property improvements, adding security lights or improving roads and sidewalks may lead to premium discounts.
Tell Your Agent – Community associations should stay in close contact with their insurance agent. That agent should be made aware of changes in your association that could affect how your community is covered. A detailed account of improvements and changes will go a long way to making sure your community has the proper coverage at the best value.
If you would like to explore your coverage – identifying gaps and potential cost savings – contact the independent agents of the O’Connor Insurance Agency. You can reach us at 314-434-0038.
Prevent Roof Leaks By Preventing Ice Dams
The icicles that hang from the edge of your roof may be pretty, but they could also be an indication of a serious problem with the roof of your building. Ice dams form at or near the edge of roof decks when melting snow and ice collect and refreeze. This in turn can prevent melt water from flowing into gutters and away from the building. An ice dam can instead direct water up under the roof covering. The insidious flow of water may not be visible until the moisture has lead to rot, mold or worse and can cause a lot of damage.
The most common cause of ice dams is a roof that is too “warm.” Inadequate insulation allows heat from the structure to warm up the roof deck, causing a trickle of melted snow and ice to flow and re-freeze where the roof is cold. Clogged gutters or damaged roofing, such as loose shingles, can contribute to the formation of an ice dam.
Fixing an ice dam after it is formed can be dangerous to both persons and property. Large chunks of ice falling from overhead can cause serious injury or death. Using blunt instruments to break up ice can cause substantial damage to your roof. Employing ice melt chemicals can be effective, but some forms are corrosive and can cause damage to painted surfaces, concrete, plants and pets. When dealing with an existing ice dam, employ a great deal of caution, or better yet, get the help of a qualified professional.
The best cure for an ice dam is prevention. Consider having a contractor examine your roof and attic space for adequate insulation and look for various places where heat may be escaping. Many companies will perform an energy audit and can identify exactly where heat is escaping. Keeping your heat inside living and working spaces has the added benefit of saving your energy dollars.
Other solutions include adding heat tapes to the edge of roofs. This keeps the edge of your roof warm enough so that ice does not form. The obvious downside is the additional use of energy, but in some cases this is the most viable solution.
Criminal Minds
By Karen O’Connor Corrigan, CIC, CIRMS
Is your community association properly protecting its funds against theft? Today’s newspapers are riddled with stories of trusted property managers and board members embezzling large sums of money over long periods of time. Do not be the victim of a false sense of security just because your community has Fidelity coverage. Community associations are non-profit organizations governed by volunteers, therefore they need unique coverages. Take a closer look at your Fidelity policy.
This type of insurance was created for businesses, which have employees. Most community associations do not have employees. Therefore, you should be sure your Fidelity policy is endorsed to cover dishonest acts by your non-compensated board members. An association often outsources the community management or accounting functions. In that case, the policy must be modified to protect against theft by that company’s employees.
The following is a checklist to make sure your community association has the appropriate coverage to protect their funds.
Employee Theft is a confusing term for community associations since they typically do not have employees. Yet, this coverage is essential to protect the funds from dishonest acts by first parties who are known to have access. This coverage should be endorsed to cover the association’s:
- Board Members
- Committee Members
- Property Manager
Accounting Service i.e. City and Village Tax Office
Forgery or Alteration of your checks of your own checks by third parties such as someone stealing your check from the mail, and then cashing it.
Computer Fraud is for a third party that uses a computer to obtain money from your account. An example is a third party using a computer to create imitation checks in your name.
Funds Transfer is needed by all communities to protect against others impersonating you to manipulate your funds. The person could assume the board member or manager’s identity to make a transfer through computer hacking or other means. Imagine a person using the transit number at the bottom of your checks to make telephone purchases.
True Tales of Twisted Minds
Unfortunately, fraud, embezzlement, and theft are more common than we may realize. These are just a few cases where the trust was broken:
- St. Peters on-site manager accused of embezzling over $250,000 over several years. $80,000 was stolen via falsified checks and credit card payments. The Board was not suspicious until a change in accounting software was made.
- Chapel Hill Estates in Town & Country lost more than $50,000 over 2 years to their Treasurer.
- Fall Creek Condominium in Branson Missouri employed an on-site manager from May 2011 to September 2012, during which time the manager allegedly issued multiple checks, transferred funds, created cashier’s checks in her name, and made deposits into her personal bank account or her company bank account called, “ME.” The allegations exceed $300,000.
- Maryland House Condominium in the central west end had a bookkeeper who pleaded guilty after being accused of embezzling more than $70,000 over a 2 year period.
- $109,000 was stolen from a condominium in the DeBaliviere place neighborhood. A volunteer diverted association money for his personal expenses over 2 years.
- For over a decade, the President of Doral Manor Condominium in west county converted over $300,000 in association fees to his own use.
- Two owners of a property management company stole over $2 million from multiple communities to pay off a debt on a real estate project.
- $1.3 million stolen from 12 community associations by management company VP to keep management company from bankruptcy.
- A management company had over 400 communities. Over 2 years, the owner embezzled over $2.2 million by transferring the funds to himself or to a business in which he had financial interest.
Is Ice Melt Safe for Pets?
With any winter storm, homeowners and condo owners have to deal with snow and ice on parking lots, driveways and sidewalks. For most homeowners and condo associations, chemical ice melt is used to keep sidewalks clear. Many residents in our communities have pets. Is the ice melt you or your community association are using safe for pets?
Traditional ice melt is not much more than chunky table salt. In small amounts, it is relatively non-toxic. However, a pet that likes the taste of salt may lick it enough to get sick. Walking on ice melt can cause injury too. Salt chunks can be sharp, and these can cause painful injuries to the paws of our pet friends, not to mention salt in the wounds!
Further, salt also can dry out the soft pads of your pet’s paws. Dried out skin can crack and become painful or even infected. The various formulations of ice melt are going to pose different hazards, from chemical burns to potential poisoning. Fortunately, there are pet-safe ice melt formulas available. Morton Salt makes “Safe-T-Pet.” Petco carries Pestell’s “Paw Thaw” and True Value stores carry “Safe Pet” ice melter. Most major retailers will have some sort of pet-friendly ice melt.
If your community is using a lot of ice melt, a few tips can help your pet on their walks.
- Massage some petroleum jelly onto the pads of their paws before going out – this will help with the cold and afford protection from salt.
- Keep a towel handy to occasionally wipe their paws clean of any debris.
- If your pets will wear them, booties can protect their paws from the elements.
- Watch your pet when out for exercise and prevent them from consuming any of these chemicals.
We at O’Connor Insurance love our pets, and we hope yours are able to enjoy the winter months free of illness. If you have any questions about insurance matters pertaining to ice and snow on your property, or the property managed by your community association, please contact one of our independent insurance agents at 314-434-0038.
Common Ground Liability
Within a development for which a community association is responsible will be common grounds. Common grounds are those areas and structures that are shared among the residents, that are not part of any property owner’s tract of land. Responsibility for common grounds typically lie with the homeowner’s association or the condo owners association. Here are a few thoughts on insurance for common grounds:
Carry Liability Insurance – Any accident or injury that happens on common ground could create a liability for the community association. Talk with your insurance agent about an umbrella policy that will cover events such as a slip and fall, or if a person is hurt on a piece of equipment on the common property.
Carry Enough Insurance – Having sufficient liability insurance for common grounds is very important. In some situations, unit owners in a condominium development may have difficulty selling their condo if lenders determine there is not enough liability insurance. Over time, a condo board or homeowner’s trustees may need to update their coverage levels to match that which is currently required.
Maintain Structures and Features – Structures such as decks, gazebos, playground equipment, and tennis courts should be kept in good repair. Injuries that can be traced to maintenance negligence can make an unfortunate situation much worse. While it is unlikely that a policy will not pay the injured party, poor maintenance can result in a community association being dropped from a carrier altogether. Poor maintenance practices will also make it difficult to get coverage and will certainly make rates higher.
Periodically Review Coverage – As your community association makes improvements to the common grounds, removes or adds features or change the size and scope of the property for which the board is responsible, they should review their coverage with their independent insurance agent. For instance, if a board invests in a program of maintenance and improvement, it is quite possible their insurance rates could go down, or their property might be eligible for coverage with carriers that were not able to write a policy in the past.
Among the independent agents at the O’Connor Insurance Agency are experts in community association insurance. Homeowner’s association board members, condo board members, and association trustees are welcome to give us a call at 314-434-0038 for any questions relating to liability insurance for communities.
