Thank you to all those who attended our Fall Board Training on October 15. It was a great success. The topic was Insurance and Financial Basics. Eric Skarnes from Insurance Warehouse presented some great information on various insurance policies, coverages and market trends.
Did you know that Minnesota is now considered a “catastrophic state” when it comes to wind and hail storms? The June 2017 and August 2019 storms played a big role in this categorization. What does this mean for you as a Board and for the Association? It means that premiums are on the rise, deductibles are increasing and fewer carriers are staying in or entering the association insurance market. Eric mentioned we can expect increases of 3-5% per quarter in the near term! Deductibles are typically per building (and the per building values are increasing) or based on a percentage of the property value. Typical per building deductibles are $25,000 or more, and the most predominate percentage used is 2%.
Since October is Fire Prevention Month, let’s touch a bit on insurance claims due to fire. Luckily, fires are less prevalent and, therefore, not as large of a concern as far as the insurance companies are concerned. While we can expect insurance rates to rise due to cost of living increases, fire coverage is not seeing the same increases as wind and hail. Master policy deductibles for fire claims are typically $5,000 to $10,000 per occurrence, although larger associations occasionally choose higher deductibles.
Our next board training, “Board Basics: An Orientation for Board Members”, is Tuesday, January 14th at 6:00 PM.Topics covered will include:
* Defining Types of “Associations”
* Roles & Responsibilities of the Board
* Financial Fundamentals
* An Overview to Governing Documents & State Statutes
* How to Run Effective Board Meetings
* Insurance Basics
* Property Management Practices