Windstorm insurance 1% deductible PER building (Texas et al)

Started by JdW • 9 replies • 471 views

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JdW (Texas)
Posts: 40

Posted:

We just got hit with a renewal with this new term. Our complex is insured for over $10 million with 11 buildings. Thus, as understand it, we now have a deductible for storm damage (wind/hail) to our roofs of $100,000 per building. Am I understanding this right? I am waiting to hear back from our agent. Our shingle roofs even if they needed full plywood reconstruction wouldn't cost $100,000 per building, let alone just replacing the shingles if a widespread hail storm damaged them.

Thoughts? Suggestions?

MaxB4
Posts: 3,513

Posted:

Based on the language, if the damage was $60,000, then the Association would be on the hook for the $60,000.

IN California, where I reside, earthquake coverage typically have a starting point of 20% per building, so if applied to your scenario, the deductible would be $200,000.00.

ChrisP5 (Missouri)
Posts: 165

Posted:

You may be right on that. We have seen similar language in some of our quotes in Missouri. We currently have a 1% deductible for wind/hail but it’s on a per occurrence basis vs. building by building in our 40 building complex. Getting hit with a $350,000 deductible would be brutal but we are also nearing end of life for our roofs according to our reserve study so getting new roofs for 350k vs 2m would be a happy moment.

MaxB4
Posts: 3,513

Posted:

Quote:

Posted By ChrisP5 on 08/16/2021 1:24 PM
You may be right on that. We have seen similar language in some of our quotes in Missouri. We currently have a 1% deductible for wind/hail but it’s on a per occurrence basis vs. building by building in our 40 building complex. Getting hit with a $350,000 deductible would be brutal but we are also nearing end of life for our roofs according to our reserve study so getting new roofs for 350k vs 2m would be a happy moment.

BUT, you do have the $2M in your reserves to replace the roofs, right?

BillH10 (Texas)
Posts: 1,217

Posted:

JdW, one of our clients is paying for an option which allows them to 'buy-down' the deductible. Of course there is a premium for this policy, it is nothing more than sheer gambling by both parties one side or the other will benefit in the long run.

JdW (Texas)
Posts: 40

Posted:

Quote:

Posted By BillH10 on 08/16/2021 4:08 PM
JdW, one of our clients is paying for an option which allows them to 'buy-down' the deductible. Of course there is a premium for this policy, it is nothing more than sheer gambling by both parties one side or the other will benefit in the long run.

Interesting. Any more details on how that works and what the premium are to bring wind and hail coverage down to something like 1% per occurrence?

JdW (Texas)
Posts: 40

Posted:

Just the record for anyone else who searches for this topic.

Our policy for wind-storm coverage has a 1% deductible. That is spread across each building on a per square foot basis. That is, if only one building in particular has a lot of damage for someone reason, the deductible will be that fraction of the 1%. For example, if the total coverage is $10m the 1% deductible is $100,000 and if there are 10 buildings of all equal size, each building's wind-storm deductible will be $10,000 alone.

As for the buyback, that was outrageous expensive- totally not worth it. For the amount bought down, the cost would be about 3.5 years of such premiums.

SheliaH (Indiana)
Posts: 6,964

Posted:

Between climate change and horrible incidents everywhere - and let's not forget Surfside - I'm not at all surprised at this. The only thing I can suggest is comparison shop as best you can and make sure your reserves are funded. Yes this will mean tough decisions on routing expenses, and the dreaded assessment increase but homeowners need to understand this is now the way of the world.

If anyone has a reserve study coming up, I'd plan for a special homeowners meeting where the reserve specialist can discuss findings and people can ask questions. And if it's been five years or more since your last one, you need to schedule one as soon as possible so you know where you stand.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

AugustinD
Posts: 3,698

Posted:

Quote:

Posted By SheliaH on 09/07/2021 5:19 AM
Between climate change and horrible incidents everywhere - and let's not forget Surfside - I'm not at all surprised at this.

I think climate change in particular is the elephant in the room. Condo owners in particular are still in denial about said elephant.

Insurers are responding like the sometimes truly beautiful automatons they are: HOA/COA Board, have enough in your reserve studies to cover much of the cost of the most expensive items, or you can forget about doing business with our company.

Quote:

If anyone has a reserve study coming up, I'd plan for a special homeowners meeting where the reserve specialist can discuss findings and people can ask questions. And if it's been five years or more since your last one, you need to schedule one as soon as possible so you know where you stand.

I am expecting that reserve study company certification, or at least companies' in-house standards, will start changing to help boards beef up their reserves without facing so much pushback from ignorant owners.

SheliaH (Indiana)
Posts: 6,964

Posted:

I see this trickling down to detached single-family homes as well (thanks to hurricane Ida! And you too, floods in the northeast.)

Can't forgot the Colorado River drying up - I just read an article on the ProPublica website about how 40 million people living in seven states and northern Mexico depend on it for water. I suppose having pristine green lawns and swimming pools won't be as important when it starts affecting your getting drinking water and food prices (because 70% of the water goes towards raising crops).

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

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