Hard Market Causing Delays in Co-op and Condo Insurance Renewals

There's a huge question on the minds of co-op and condo boards and their property managers these days: Why are our insurance proposals and renewal information being delayed, sometimes until the day of expiration?

The answer is complicated. It begins with today's hard insurance market, in which insurance carriers protect their profitability by raising premiums, lowering coverage limits and sometimes adding exclusions to policies. Many carriers, squeezed by declining profits, have simply left the New York market. One result is that the umbrella insurance market — coverage for extreme losses not covered by general liability, property or directors & officers policies — is in turmoil. So brokers are going into the market and trying to replace coverage more than ever. But the remaining umbrella carriers who are still in the game are inundated with submissions from brokers. And it’s not just replacing the umbrella policies. We’ve also been seeing many commercial package carriers that are non-renewing portions of their books of business and/or non-renewing individual accounts as well.

The main reasons we are seeing for non-renewals are claim history, building violations, and boards' non-compliance with insurers' recommendations for minimizing risks. The carriers are still holding all the control, and your brokers are trying their best to secure replacements policies for their co-op and condo clients. But most carriers — general as well as umbrella — are slammed with submissions. This leaves the carriers to underwrite what they want, when they want, and sometimes not until very close or even on expiration.

Insurance brokers are doing everything we can to get replacement policies written in a timely manner, but the truth is that oftentimes our hands are tied. We are waiting patiently — or impatiently — for our quotes, just like our clients are. We hope in the future (hopefully the near future) that things calm down, but right now, we’re are still in the thick of it.

My advice to co-op and condo boards is to stay in touch with your broker. Feel free to ask questions and stay involved. I’m on a conference call or board meeting several times a week to help explain and advise the best way to help our board clients. It's difficult to understand if you are not aware of what is going on in the big picture. 

Samantha Tucci is a business development specialist at the insurance brokerage Mackoul Risk Solutions.