When you’re a broker who wants to cover an apartment building or condo complex located in Ottawa, You should be aware of the obstacles — and how to deal with them.
Many insurance firms are reluctant to invest in new multi-residential properties until they meet specific requirements in today’s tense market. These kinds of properties are inaccessible to insurance companies in the current situation. Therefore you should be cautious about giving quotes for properties that are not top of the line.
This article will explain the elements insurance brokers must consider when seeking insurance for a brand new multi-residential home. It will help you identify bad leads and better utilize your time to respond to these kinds of customers.
What to Look for in a New House
If you are offered a deal for a brand new multi-residential building in Ottawa, the most important thing to consider is the property’s age.
You should look for homes constructed recently, typically in the past ten years. However, you’ll want to concentrate your efforts on properties owned by an established condominium board. We suggest that you stay away from any new properties.
If the questioned building can not get built within the last ten years, it must have had significant improvements within the last few years. While there are variations in this rule of thumb, our experience has proven this to be the ideal method to use when quoting new multi-residential properties. In the following paragraphs, we’ll discuss why these aspects are crucial to insurers.
Building Regulations
Property age is crucial due to the evolution in building standards in the last decade. Measures for building are frequently changed, and partially, it is influenced by how the insurance industry evaluates the risk of exposure.
For instance, the older townhouse-style condominiums in Ottawa generally don’t have fireproofing built into the structure. The previous versions of building codes did not need this feature. They get constructed as frame houses, and as a consequence, there’s a good possibility that one fire could cause severe damage to the entire block. Insurance companies today are not willing to accept this kind of risk.
The majority of insurance companies will cover concrete buildings that are fire-resistant. Although some older buildings might be capable of meeting these requirements, they are usually the rare exceptions.
The Other Building Methods Are Essential to Take into Consideration:
- Instead of PVC or copper, Avoid multi-residential properties that use cast iron pipe.
- It gets also recommended to stay away from buildings with knob-and-tube wiring or aluminum wiring because they can be fire hazards.
- Modern homes with modern building methods are the best option. It is more important to focus on condominium or apartment complexes built within the last ten years.
Condominium Administration
Suppose you are quoting a multi-residential building, looking for facilities with an established condominium board. It gets recommended Condo boards aid in managing the property’s financials, keeping the building maintained, and reducing the number of claims.
Once a new apartment gets constructed, it’s common to see builders cut charges for condos to draw tenants. Builders are likely to assume a worst-case scenario when estimating the costs of any future upgrades and repairs. A well-trained condo board usually increases condo fees to accumulate enough reserves to provide for the property in all circumstances.
When quoting, we suggest selecting a well-established property with a minimal amount of claims. It will usually indicate that the condo board has raised the fees effectively and can oversee the upkeep of the property through dips into reserves instead of submitting claims for each minor problem. It is also crucial to prepare for future upgrades to the property that will require plans for the coming years.
Insurance companies don’t want to manage large claims from multi-residential properties. You should look for properties with condominium boards that can manage their finances and have very few claims to be recorded.
What Will Happen Next?
The present challenge of securing new multi-residential buildings has created a documented issue with condo coverage. Many older homes within the Province are uninsured because of the difficulties in obtaining coverage. While most companies continue to protect existing structures, many of them refuse to accept new buildings.
It is vital to comprehend the multi-residential property’s situation when looking to establish a new business as an agent. If you wish to cut down on both time and effort, it’s vital to select high-end, new properties with solid condo boards.
Call Commercial insurance in Ottawa at (613) 454-5640 or send us an e-mail at info@commercialinsuranceottawa.com.