Published on: Jul 2, 2009
Apartment owners will be salivating at the dropping cost of living in Ireland which should mean service charges heading in the right direction. However, one area will remain a sticking point: insurance.
Every management company takes out a block insurance policy which covers costs of repairs (to malicious damage or build problems), a re-build (if it all goes horribly wrong) and public liability (in case anything happens your visitors). It’s an essential part of every management budget and usually a large part of it too so any changes will affect each owners service charge.
Unfortunately, word has reached the Apartment Owners Network that insurance costs are likely to rise in the near future. With building costs falling, we had expected insurance prices to fall too but insurance companies have been having a hard time with apartments, many of them making a loss because of the large number of payouts. With the large number of apartments in Ireland and the small number of companies providing block insurance, they have been particularly exposed and are planning on rising the premiums and the excess to make sure they’re not burned again.
If you’re on the board of directors, you should start planning now to limit the impact this will have on you. Fortunately, there are several steps you can take:
* Commission a valuation report
This will tell you how much it would cost to re-build your entire block. It is very likely that the insurance company are using the same value as in the peak of 2006. A lower valuation could significantly reduce your premium.
* Shop around
It may be time-consuming but talk to as many insurers as you can, especially once you’ve had your property re-valued. Use an insurance broken but be prepared to do some of the leg work yourself to make sure you’re getting the best deal possible
* Be aware of your claims history
Apartments with bad claims histories will be especially hard hit during the rises. Some of our members with poor histories report a doubling of premium and a quadrupling of their excess. Make sure you know every claim that is being made and decide if the cost of paying that claim yourself could repair your history