Insurance is a major cost to the Community Titles Scheme. Therefore the committee should spend much more time than they do in considering the implications of insurance and how certain actions will create significant savings.
5 simple ways to save money on insurance.
- Shop around. Don’t accept the first quote.
- Consider using an Insurance Broker to get the best product and price.
- Have regular valuations completed on the complex, at least each 3 years as building costs do not always rise.
- Ensure the valuation is based upon your specific complex and not just an industry average.
- Ensure the complex is safe from hazards to ensure injury claims are not made.
Shop around. Don’t accept the first quote
It is surprising that the majority of people will shop around when purchasing for their own use and some people will even travel well out of their way to save a few cents per litre on fuel. But those same people will sit at a committee meeting and accept the first quote supplied for an Insurance Valuation report.
Depending upon the size of the complex, the cost savings by obtaining additional quotes for Insurance Valuation reports can amount to thousands of dollars.
The beauty of this measure is that it comes at no cost to the committee.
Consider using an Insurance Broker to get the best product and price
An Insurance Broker will work for the committee. Their job is to get the best product at the best price.
Do not just accept the price submitted by your existing insurance company. Get quotes to save money.
Tens of thousands of dollars can be saved each year by getting competitive quotes from various insurance companies.
Have regular valuations completed on the complex, at least each 3 years.
Building costs do not always rise.
The cost of construction is based upon many factors which include inflation pressures on wages and materials. However, when construction activity is subdued, builders may quote much more competitively in a slow market than in a booming construction market.
Generally the insured amount is increased by inflation each year. Over time the original amount can double even though the amount far exceeds the cost to replace the complex.
Regular valuations will take away these standardised increases and ensure the complex is insured for the correct amount and not an inflated amount that only increases premiums paid.
Ensure the valuation is based upon your specific complex and not just an industry average
For insurance valuation companies, it is easy to develop a replacement cost estimate using an industry average.
However; all complexes are different and have design features or finishes that are specific to a particular complex. Only use a company that will visit your complex and base the replacement cost estimate upon your specific complex and its unique features.
The alternative is to have your complex insured for an incorrect amount.
Ensure the complex is safe from hazards to ensure injury claims are not made.
At some stage an accident will occur in your complex. Depending upon the circumstances, the injured party may take legal action against the BC / OC.
The insurance policy should cover the BC/OC for any claims. However, there most likely will be an excess to pay, plus the premiums will most likely increase. Together these may cost thousands of dollars.
A sure way of reducing the likelihood of accidents and injuries on site is to undertake professional safety audits and rectify all issues identified in the report.
By investing in a safety audit for a few hundred dollars, thousands of dollars may be saved should injuries occur.