THOUGHTS ABOUT INSURANCE

This will be my last blog before I go in for left knee replacement to match my now bionic right knee. I’ve made my wishes re the election known. Whatever the outcome, may our Village prosper and be a healthy and amicable place to live. I always liked the way President Reagan and House Speaker Tip O’Neill, polar opposites politically, would sit down together in the evening, enjoy a cigar, and tell Irish jokes. And how Ted Kennedy, the ultra-liberal senator from Massachusetts, had a close friendship with Utah’s arch-conservative senator, Orrin Hatch, who befriended and helped Kennedy many years ago in a time of trouble.

Insurance is our Village’s biggest single expense by far. Dan Gladstone admits to an oversight error having been made when our building insurances renewed. If I’m clear about it, it had to do with the insurance not covering water leak damage. Whatever it was, it was a major omission. I do not fault Mr. Gladstone for this. We have all made big mistakes.

But it points up a need expressed by Dave Israel. We need more professionalism in the Village. An attorney should be hired to carefully review our insurance policies each year to see that they cover what we need. That we are not paying for coverages we DON’T need. And that we are getting the most for our money from reputable insurance agencies and companies.

Our 11 (or perhaps it is 12) building insurances now include a couple of “Buy Down” policies. I don’t know what the premiums for these are—they may have cost us the moon—but the benefit has been huge. Suddenly, the hurricane deductible on three 2-story buildings like ours, worth about $1.7 million, has gone down from a scary $34,000 to a manageable $8500. That is because the Buy Downs reduced our deductible from two percent to a half percent.

Suddenly, the need (at least to my unprofessional eye) for the $2000 from everybody’s homeowner’s coverage, to go toward the association’s huge windstorm deductible, has become almost a non-issue. Most of our 24- to 26-unit associations have (or should have) $8500 in contingency funds. If not, it would mean levying only a $350 special assessment on every homeowner. That is less than most homeowners pay for homeowner’s insurance for one year.

That problem—how to come up with a $34,000 windstorm deductible—has thus gone away. The big problem NOW is the normal (non-windstorm) $5000 deductible on the association’s insurance, applicable in the event of a water leak. Associations really come into the picture in these water leak situations, because the ASSOCIATIONS are now responsible for the drywall: the ceilings, exterior AND interior walls. Can we do something about THIS?

To me, this is the next big question. It is one where UCO—just as with the Investigations Department—could use a paid professional expert, not full-time in this instance, however, to look into our insurance coverages each year. And, as Dave Israel says, where we need more than one knowledgeable insurance person among those in UCO.