[00:00:34] Paula Chin: Welcome to Problem Solved, a conversation about problems that have been solved in New York co-op and condo buildings. I'm Paula Chin, and my guest today is Gina Corso, the new business account manager at Mackoul Risk Solutions. When it comes to insurance for co-op and condos, boards need to make sure there aren't any gaps in coverage.
You recently worked with the condo where you discovered there were huge gaps that put them at serious risk.
[00:01:03] Gina Corso: We had a situation where we were able to take over a beautiful, well-maintained condominium association. Once we were recognized as broker of record, it was our responsibility to complete the renewal applications. In completing those applications, we indicated that the association maintains a beach. They had a beach as part of their amenities, and the carrier came back and advised that they were unaware of the beach exposure, it did not fit their guidelines and that they would unfortunately have to non-renew the coverage.
That being said, we had very limited time to get the account out to market. We had very slim markets to approach because of beach exposure. It's not something that most carriers could entertain, and should there have been an incident at the beach, there would possibly be no coverage because the carrier was unaware of the exposure .
[00:01:55] Paula Chin: And this would mean if somebody got injured or even drowned, they were really exposed. How could an error like that happen?
[00:02:02] Gina Corso: It simply could have been omitted on the original submission, and then renewed year after year with the incorrect information. The carrier didn't inspect in this case, so they relied on the information provided by the previous broker.
[00:02:15] Paula Chin: So boards should clearly make sure that your carrier does inspect your property and maybe even do so every time you renew.
[00:02:22] Gina Corso: It is important to have a pre-inspection. Some carriers pre-inspect, some carriers do not, but it's important if they're not pre-inspecting, to make sure that you are having the conversation with your broker and going over all the unique features of your building.
[00:02:38] Paula Chin: Did this building have other significant gaps in coverage?
[00:02:39] Gina Corso: Yes, the association had some boats, kayaks and lifeguard equipment that were not scheduled on their property policy, so we had to make sure that those were included as there was no prior coverage. In addition, their general liability had an event exclusion. They have multiple condo association-sponsored events, and should there have been an issue, or if someone got hurt at an event, there would have been no coverage for that. We had to obtain a separate event policy to make sure that they had coverage for that exposure.
[00:03:10] Paula Chin: So no doubt this expanded coverage was a lot more expensive for the condo.
[00:03:14] Gina Corso: Absolutely. You know, I'm thankful that we were successful in replacing coverage, but unfortunately we had to lower their limits and it about tripled their cost. But we were able to correct the deficiencies and make sure that they were covered properly. They maintained a $50 million umbrella, and the most that we were able to get was a $25 million umbrella. You know, when speaking with the insured, we agreed that the $25 million limit was sufficient. It was a shame that we weren't able to match what their prior coverage was.
[00:03:45] Paula Chin: How common is this kind of problem when you take on a new account?
[00:03:49] Gina Corso: It actually happens more often than you would think. I've seen it all. I've seen unit counts incorrect; construction of the building is incorrect; amenities are left out. A big one that we see commonly is actually owner occupancy percentage. A lot of carriers have strict guidelines when it comes to the amount of owner-occupied units versus rental units, and if that information is not correct, you can also have a huge issue in regards to coverage because you can potentially be with a carrier who would not have written your insurance if they knew that you had a high rental percentage.
[00:04:25] Paula Chin: What's the takeaway for boards here?
[00:04:26] Gina Corso: Review your coverage. Maybe find a broker that specializes in habitation risks. A broker who specializes in co-ops and condominiums is more in tune with the habitation markets and they're more likely to ask the right questions, whereas a broker that's a generalist might not be well versed in what exactly is needed.
[00:04:46] Paula Chin: That's great advice, Gina. Thank you so much for joining us today.