Simply Unquotable

The Curveball

A 95-unit condominium in Westchester County had a recent history of some general liability claims. They had four claims with over $300,000 in claim reserves put on by the carrier against a premium of only $32,000. And unfortunately, the carrier declined to renew the condominium's insurance for this year. So we went to 12 different insurance carriers for package policies, another 10 different insurance carriers for liability policy quotes.

Of those 22 carriers, 17 were simply unwilling to quote. And the quotes that we did get were not very good at all. We got a policy quote for $99,000, but the policy would have had a New York Scaffold Law exclusion. So if a contractor's worker got injured on the job on the condo property, the condo's insurance would not cover that claim. The best option we got for a policy that would have covered Scaffold Law claims was $130,000, and it had a $10,000 deductible. A co-op or condo’s liability policy must have that coverage.

The Response

We looked at the list of carriers we had approached. Levitt-Fuirst has certain relationships with carriers that go back decades, and we have access to upper-level management that can sometimes look at things in a different light, or relook at things when asked. So we went back to a carrier that had insured this property a number of years ago and had lost the business to a more competitive option. And we knew that the carrier had likely declined this time because they thought that they couldn't compete on price. Also they were very concerned, obviously, about the condominium’s claims history.

So we went back to the carrier, and we said: "Here are the details on these claims. Although some of them have rather large claim reserves, in fact none of the claims are results of poor management, poor operations or lack of maintenance." And we gave them as much detail as we could to make them feel comfortable that the claims were simply accidents, which sometimes happen and sometimes happen in bunches. Then we asked them, in light of those details, to give us a quote at a premium they felt comfortable with. We did not give them specific guidance, but we did ask them to give us a number, whereas previously they had declined.

The Result

Fortunately, they did come up with a number which, while high – just under $70,000, or roughly twice what the condo had been paying – was by far the best option that we came up with. It was more than $20,000 less than the next-best premium, and the coverages were superior. The policy did not exclude Scaffold Law coverage, and there was no general liability deductible. So it was a clear win.

This story reveals the reality out there in today’s hard insurance market. If a co-op or condo has a loss history and a carrier happens to non-renew because of that, then get ready to get socked. The premiums could easily double, if not more, and you could be looking at a deductible where you didn't have one before – as well as a Scaffold Law exclusion.