Bill Morris in Board Operations on July 13, 2023
Fire ravaged a six-story condominium in Brooklyn’s Sunset Park neighborhood in 2019, causing the roof to collapse. When the flames were doused, it came to light that a significant number of the unit-owners had little or no homeowner’s insurance.
“Boards need to stop taking a laissez-faire attitude toward homeowner’s insurance,” Theresa Racht, the condominium’s attorney, said at the time. “It’s very clear how under-insured people are. There is no law requiring that people have insurance, but the governing documents should require it. Boards need to get more aggressive in this area.”
To help boards police this gray area, the insurance brokerage Mackoul Risk Solutions has launched a program called Homeowner’s Insurance Monitoring. If the governing documents require residents to carry a certain level of homeowner’s insurance, co-op shareholders and condo unit-owners must register with the monitoring program and prove that they carry the requisite insurance, by either producing a certificate of insurance or a declaration page from the policy that specifies coverage limits and the date the policy expires.
Residents who supply proof of insurance but don’t have adequate coverage will receive up to eight follow-up notices that they are not in compliance. The board or property manager will receive notices of who has not registered and who has registered but failed to carry adequate insurance.
Some boards have the power to levy fines for noncompliance.
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Each shareholder and unit-owner receives a reminder 30 days before their renewal date, along with a request for proof that the policy has been renewed. Up to eight follow-up notices will be sent. The board will be notified the day after the expiration date if a policy is not renewed.
Mackoul Risk Solutions built Homeowner’s Insurance Monitoring on a software program designed to upload insurance policy declaration pages. After rolling out the program in April, the brokerage is now tweaking the program.
“Over the years, more and more boards have required residents to carry homeowner’s insurance, and they dumped the monitoring on the property manager,” says Ed Mackoul, president of Mackoul Risk Solutions. “It’s a huge amount of work — it’s a whole other job over and above the manager’s duties.”
Since the April launch, six boards have signed up for Homeowner’s Insurance Monitoring and another 20 have requested price quotes. For a 100-unit building, the service costs about $2,200 a year.
“It’s generating a lot of interest,” Mackoul says. “The property managers love it. The boards love it. With shareholders and unit-owners there has been some pushback because it’s something new.”
The thing to remember about monitoring insurance, he adds, is that it’s a never-ending job. “And now the job is getting done correctly. Insurance coverage is getting tracked. We’ve found people who were insured incorrectly and people who have no insurance. It’s a continuous job.”
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