Condo Media - February 2024 - 14
Asked & Answered
There Are
There Are
Options
Self-insuring Is Not One of Them
Self-insuring Is Not One of Them
Our condo insurance policy
was not renewed by our carrier,
and other companies are quoting
premiums that are more than double
our previous premium cost for the
It is no secret to community
association managers,
trustees, and unit owners
that insurance costs have
THIS ANSWER WAS
PROVIDED BY
Gregory
G. Pierce,
CPA, LIA
SENIOR VICE
PRESIDENT
NORTHSTAR
INSURANCE
SERVICES, INC.
14 CONDOMEDIA February 2024
been, and continue to be, on the rise
across the marketplace in the current environment,
a trend that can be magnified
dramatically depending on the specific
characteristics associated with an association's
property. For a variety of reasons,
associations in recent years have seen
substantial increases in what was already
likely one of the larger budget line items
for their community, oftentimes alongside
unfavorable alterations to program
structure (coverage offered, deductibles,
etc.). In the face of this difficult insurance
environment, boards of trustees and
their management team may be tempted
to consider the concept of self-insurance
as a cost-saving strategy. While the
reasonableness of one's decision to selfinsure
in general terms depends largely
on the financial wherewithal to self-fund
and other companies are quoting
premiums that are more than double
our previous premium cost for the
same coverage. Is self-insuring an option?
same coverage. Is self-insuring an option?
claim values in the event of a loss, there
are some systemic barriers that complicate
one's ability to take this approach
regardless of financial position.
BARRIERS TO SELF-INSURING
Self-insurance, in its purest form, is
simply the decision to forego purchasing
insurance for an otherwise insurable risk
exposure. For example, a community
association that wants to self-insure their
property exposure (the risk of property
being damaged or destroyed as a result
of a loss, e.g., fire or water damage) will,
instead of buying an insurance policy
that addresses this risk, resolve themselves
to fund their own repair costs in
the event something happens that would
otherwise trigger a claim situation.
Obviously, if the community property
in question does not incur any damage
over the course of a period during
which it is self-insured, the association
saves money on insurance premiums;
Condo Media - February 2024
Table of Contents for the Digital Edition of Condo Media - February 2024
Contents
Condo Media - February 2024 - Intro
Condo Media - February 2024 - Cover1
Condo Media - February 2024 - Cover2
Condo Media - February 2024 - Contents
Condo Media - February 2024 - 2
Condo Media - February 2024 - 3
Condo Media - February 2024 - 4
Condo Media - February 2024 - 5
Condo Media - February 2024 - 6
Condo Media - February 2024 - 7
Condo Media - February 2024 - 8
Condo Media - February 2024 - 9
Condo Media - February 2024 - 10
Condo Media - February 2024 - 11
Condo Media - February 2024 - 12
Condo Media - February 2024 - 13
Condo Media - February 2024 - 14
Condo Media - February 2024 - 15
Condo Media - February 2024 - 16
Condo Media - February 2024 - 17
Condo Media - February 2024 - 18
Condo Media - February 2024 - 19
Condo Media - February 2024 - 20
Condo Media - February 2024 - 21
Condo Media - February 2024 - 22
Condo Media - February 2024 - 23
Condo Media - February 2024 - 24
Condo Media - February 2024 - 25
Condo Media - February 2024 - 26
Condo Media - February 2024 - 27
Condo Media - February 2024 - 28
Condo Media - February 2024 - 29
Condo Media - February 2024 - 30
Condo Media - February 2024 - 31
Condo Media - February 2024 - 32
Condo Media - February 2024 - 33
Condo Media - February 2024 - 34
Condo Media - February 2024 - 35
Condo Media - February 2024 - 36
Condo Media - February 2024 - 37
Condo Media - February 2024 - 38
Condo Media - February 2024 - 39
Condo Media - February 2024 - 40
Condo Media - February 2024 - 41
Condo Media - February 2024 - 42
Condo Media - February 2024 - 43
Condo Media - February 2024 - 44
Condo Media - February 2024 - 45
Condo Media - February 2024 - 46
Condo Media - February 2024 - 47
Condo Media - February 2024 - 48
Condo Media - February 2024 - Cover3
Condo Media - February 2024 - Cover4
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