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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.
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.
Condominium Master Policy Basics
If you own a condominium, or are a member of the condominium association board, you may have heard of the master policy. The master policy provides liability protection and covers the real property of the condominium buildings. In the event of a fire, storm, or other loss, where roofing, siding, wiring, or plumbing could be damaged.
With some exceptions, the master policy will typically protect portions of the individual unit itself such as the drywall, paint, cabinetry, lighting, and all attached fixtures.
The unit owner’s personal property such as furnishings, electronics, clothes and other possessions are not covered by the master policy. For example – let’s say there is a fire on the deck of your condo. After the fire department finishes, you find the deck, the siding and wall, as well as parts of the kitchen floor were burned. In addition, the walls of your kitchen, some of the wiring, and your kitchen table and chairs are damaged by water.
Generally, the master policy would cover replacing or repairing the deck, siding and walls, and the floor damaged by the fire. The ruined wiring would also be covered. The condo owner’s insurance policy would cover damage to the kitchen table and chairs. A master policy might not cover any upgrades to the condo unit that the owner made, such as updated counter tops or a solar energy system.
The master policy does not cover living expenses during repairs, however both of these can be covered by a unit owner’s policy.
It is important that both the condo owner and the condo association board know what is and is not covered under likely scenarios. Both the master policy and the individual unit owner policy will likely have a deductible. How deductibles are managed between the master policy and the individual policy is an opportunity to save money for both the association and the condo owner in the event of a loss. How this might play out in a loss should be understood ahead of time and procedures should in place to serve the interests of the community and unit owner.
The insurance agent for the master policy should periodically review what is and is not covered under the master policy for an association and detail how deductibles are allocated. Your insurance agent should be available to participate in a question and answer session at a condo owner’s meeting. New condo owners will need information on how to best structure their personal coverage and current residents might benefit from a refresher. O’Connor Insurance recommends such a review at least once per year.
If you have questions about condo association master policies, individual unit owner policies or specific questions about your insurance policy, give our office a call at 314-434-0038.
