The most common mistakes when securing a homeowners association
Signing up for community insurance seems like a simple task. However, many homeowners find that their policy does not perform as they expected when an incident occurs.
Outdated capital structures, insufficient coverage or unnecessary guarantees are some of the most common mistakes and can translate into significant economic costs for all residents.
In this article we review the most common errors when securing a condominium community and explain how to avoid them so that the building is truly protected.
Why is it so important to review a community's insurance policy?
Community insurance protects the common elements of the building against numerous risks, such as fires, water damage, weather phenomena, vandalism or claims from third parties.
Although in some autonomous communities its hiring may be mandatory, even when it is not, it is one of the most effective tools for protecting the common heritage of the owners.
In addition, the needs of a community evolve over time. Installing elevators, solar panels, charging points for electric vehicles, or video surveillance systems makes it advisable to periodically review the policy to ensure that it continues to adapt to the real risks.
Securing the building with capital less than its reconstruction value
One of the most common mistakes is to under-insure the capital to reduce the premium.
When there is underinsurance, the insurer can apply the proportional rule, reducing the compensation by the same proportion as the building was undervalued.
How to avoid it?
It is advisable to periodically update the reconstruction value of the property, taking into account renovations, extensions or improvements made to the community.
The idea that insurance covers absolutely everything
Not all policies offer the same guarantees.
Many presidents or administrators discover too late that certain damages were not included or that there were economic limits or franchise agreements.
For example, some policies may exclude certain aesthetic damages or certain acts of vandalism.
Council
Before signing up for insurance, it is advisable to carefully review the coverage and exclusions to avoid any surprises if an accident occurs.
Not reviewing civil liability
Civil liability is one of the most important coverages in community insurance.
A tile falling on a vehicle, water leakage into a home or an accident in the common areas can lead to very high financial claims.
Having insufficient limits may force the community to assume part of the compensation.
Forgetting the new facilities of the building
Many communities have incorporated elements that did not exist originally in recent years.
Among them are:
- Solar panels.
- Chargers for electric vehicles.
- Video surveillance systems.
- Automatic doors.
- Air conditioning equipment.
- Defibrillators.
If these facilities are not communicated to the insurer, they may not be properly insured.
Not updating the policy after a major renovation
The rehabilitation of façades, the renovation of roofs, the replacement of the elevator or a comprehensive renovation modify the insured risk.
When the policy remains the same for years, it may no longer reflect the reality of the building.
A review after any major reform helps to maintain adequate protection.
Choosing insurance solely based on price
It is one of the most common mistakes.
Two insurance policies with similar premiums can offer very significant differences in aspects such as:
- Limits of compensation.
- Coverages included.
- Support services.
- Claims management.
- Legal defence.
- Franchises.
An economic policy can turn out to be much more expensive when the time comes to use it.
Not having specialized advice
Each building has distinct characteristics.
It is not the same to ensure a community with ten homes than another with commercial premises, garages, a swimming pool, sports facilities or photovoltaic panels.
Having a specialized insurance broker allows you to analyze the specific risks of each community and design a solution tailored to your needs.
In addition to comparing different insurers, the broker advises throughout the policy's lifetime and accompanies the community in the event of a disaster.
How do you know if your community's insurance needs a review?
There are some signs that indicate that the time has come to review the policy:
- The building has more facilities than when the insurance was contracted.
- Important reforms have been carried out.
- Several years have passed without reviewing the capital.
- It is not known exactly what coverage the policy includes.
- The community has suffered several recent disasters.
- The premium is only renewed automatically year after year.
Regular check-ups can detect deficiencies before problems arise.
Conclusion
Signing up for community insurance does not consist solely of to fulfill an obligation or look for the cheapest premium.
The key is to have protection adapted to the actual characteristics of the building and to review it periodically so that it evolves along with the community.
At PIB Group Iberia we analyze the specific needs of each homeowners association to design customized solutions that help protect the common heritage and provide peace of mind for both presidents and administrators as well as for neighbors.
Contact us at PIB Group Iberia for personalised advice without obligation.
