|
Cost savings or coverage improvements on all policies |
The Waverly Condominium Association recently completed its insurance negotiation and renewal process. The board is delighted to announce that the negotiations were highly successful, resulting in $334,600 in overall savings this year. The association will pay 36% less in insurance premiums this year, with only $516,322 to be paid in 2008 versus $815,560 paid in 2007.
The association finances its premiums each year in order to avoid a large lump sum payment, and so that funds may be available for other operating needs. The association also negotiated improvements in the insurance financing agreements, and will pay $37,539 less in premium financing interest and financing fees this year.
Shawn Bryant said “Insurance is the association’s largest expense. We are more than pleased to see our insurance-related payments go down by $334,600. The scale of these savings is significant – they represent nearly 10% of our overall operating budget for 2008.”
The insurance negotiation team included board members Shawn Bryant, Robert Dionne, Bob Horvath, and Peter Richter as well as Property Manager Tania Garcia and Assistant Property Manager Chris Pascual. In addition, the board retained the services of Larry Shafer of CondoScience, to provide consulting and project management for the insurance negotiation and renewal project.
|
Item |
2007 |
2008 |
Savings |
|
Wind & Property |
$691,542 |
$461,390 |
$230,152 |
|
General Liability |
$79,662 |
$20,318 |
$59,344 |
|
Boiler & Machinery |
$8,097 |
$7,620 |
$477 |
|
Umbrella |
$15,971 |
$9,285 |
$6,686 |
|
Crime |
$1,195 |
$1,351 |
-$157 |
|
Directors & Officers |
$2,349 |
$1,888 |
$461 |
|
Glass |
$16,745 |
$16,647 |
$98 |
|
Premium Subtotal |
$815,561 |
$518,499 |
$297,061 |
|
Interest |
$21,351 |
$11,401 |
$9,950 |
|
Financing Fees |
$27,589 |
$0 |
$27,589 |
|
TOTALS |
$864,500 |
$529,901 |
$334,600 |
The team solicited insurance proposals from several different insurance agents and many insurance carriers. After three months of negotiation, the Waverly’s policies were finally purchased through Aon, Florida Assurers, and Gendelman Insurance. The table to the right highlights the premium savings.
The team was also able negotiate significant improvements to the insurance premium financing agreements. The new financing agreements carry no financing fees, and the interest rate on each has been lowered one full percentage point from 5.77% APR to 4.77% APR on all policy premiums.
In addition to premium and financing savings, the team was able to improve the coverage provided by the portfolio of policies. Some coverage improvements include:
- Improved Wind & Property coinsurance coverage from 90% to 100% of the building’s appraised value
- Switched from a calendar year to per-occurrence deductible for wind coverage, which may save nearly $1,000,000 in deductible payments in the event of a hurricane
- Improved Directors & Officers and Crime policy terms
Larry Shafer from CondoScience played a key role in the insurance negotiation project. Mr. Shafer offers insurance negotiation consulting and other services that help condominiums improve their financial performance. If you know of another condominium that could benefit from his services, please contact him at (305) 790-5144 or see http://www.condoscience.com.
