Understanding Your Insurance Policy's Fine-Print What You Need to Know about Riders

No one needs to be reminded about the personal loss and devastation that Superstorm Sandy brought to the Jersey Shore in October 2012. Natural disasters like these are on the rise and serve to underscore the importance of having appropriate insurance policies in place. While board members have a good grasp of common insurance coverage such as homeowners, liability and umbrella, there are other specialty insurance policies to consider.

“The biggest issue we see is the underinsurance of older unique buildings. Insurance companies can generally penalize an association when the building is underinsured which is referred to as coinsurance,” says Jon Schildt, managing principal of Calculated Risk Advisors, a national consulting firm and professional liability insurance brokerage. “If a building is underinsured and property damage occurs, owners are often shocked when they find out that the damage will not be fully reimbursed.”

When looking in to specialty insurance policies, it is often recommended to revisit existing policies to guarantee that all the proverbial ducks are in a row. “Boards need to speak with broker/agents who understand condo insurance and make sure the condo’s needs are met,” says Ronald Diskin, president and CEO of the East Hanover-based Ronald Diskin Associates Corp. “Each case is different, depending on the bylaws.”

Going Green?

In recent years there has been a growing trend centering on “green” specialty insurance. More and more boards are looking into related policies; however, it is suggested to double-check policies to best understand what is covered, green or otherwise.

“Environmentally-friendly installations like solar panels once installed are usually considered part of the building coverage,” says Cheryl Rhine, CIC, an account executive at the Toms River-based BHB Insurance Services. “Boards should check with their insurance representative to see if their carrier has any special requirements or exclusions.”

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