insurance

Liz Weston: Beware high-risk homes that drive up insurance

When house hunting, the price of homeowners insurance probably isn’t top of mind. But homes with hidden risks can make getting coverage difficult, expensive or both. Learning how to identify them could save you a bundle.

This could be a particularly important concern for first-time homebuyers and those moving from cities to suburban or rural areas who may not be aware of common hazards, says Jennifer Naughton, risk consulting officer for North America for Chubb, an insurance company.

Three out of 10 city dwellers told a Chubb survey in early August that they were considering moving out of the city because of the novel coronavirus outbreak. Meanwhile, the number of first-time homebuyers in the first half of 2020 rose 4% compared to a year earlier as lower interest rates made mortgages more affordable, according to Genworth Mortgage Insurance.

WHERE’S THE NEAREST FIRE HYDRANT?

A homeowners insurance premium can depend in part on distance to the nearest fire hydrant and fire station, Naughton says. Homes that are on narrow roads or otherwise difficult for fire trucks to access also could be more expensive to insure.

“If they have to cross over a bridge, it’s not only a consideration of can a car go over that bridge, but also can a fire engine,” she says.

Some homes are at such high risk of wildfires and severe weather — hurricanes, tornadoes, windstorms and hail — that private companies won’t insure them. Without insurance, you can’t get a mortgage, so you’d need to turn to state-run risk pools such as Beach and Windstorm Plans or Fair Access to Insurance Requirements Plans, better known as FAIR. These policies typically cost more and cover less than regular homeowners insurance.

Also, many homeowners policies in storm-prone areas have hurricane deductibles that are higher than the normal deductible,

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Beware high-risk homes that drive up insurance

When house hunting, the price of homeowners insurance probably isn’t top of mind. But homes with hidden risks can make getting coverage difficult, expensive or both. Learning how to identify them could save you a bundle.

This could be a particularly important concern for first-time homebuyers and those moving from cities to suburban or rural areas who may not be aware of common hazards, says Jennifer Naughton, risk consulting officer for North America for Chubb, an insurance company.

Three out of 10 city dwellers told a Chubb survey in early August that they were considering moving out of the city because of the novel coronavirus outbreak. Meanwhile, the number of first-time homebuyers in the first half of 2020 rose 4% compared to a year earlier as lower interest rates made mortgages more affordable, according to Genworth Mortgage Insurance.

WHERE’S THE NEAREST FIRE HYDRANT?


A homeowners insurance premium can depend in part on distance to the nearest fire hydrant and fire station, Naughton says. Homes that are on narrow roads or otherwise difficult for fire trucks to access also could be more expensive to insure.

“If they have to cross over a bridge, it’s not only a consideration of can a car go over that bridge, but also can a fire engine,” she says.

Some homes are at such high risk of wildfires and severe weather — hurricanes, tornadoes, windstorms and hail — that private companies won’t insure them. Without insurance, you can’t get a mortgage, so you’d need to turn to state-run risk pools such as Beach and Windstorm Plans or Fair Access to Insurance Requirements Plans, better known as FAIR. These policies typically cost more and cover less than regular homeowners insurance.

Also, many homeowners policies in storm-prone areas have hurricane deductibles that are higher than the normal deductible,

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Condo Smarts: Strata insurance covers only original finishing

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It is always in the best interest of the sections and the leaseholders to review their sections bylaws and the nature of the section to determine if the sections require additional insurance coverage for claims that may impact directors and officer liability, general liability for the section or certain types of businesses, additional coverage for assets purchased or owned by the section, and to inform the leasehold tenants of their obligations to insure their personal assets and any leasehold improvements.

Strata corporations with sections created are often a complicated series of obligations and liabilities that require legal review of the general risks associated with the sections to determine if additional insurance coverage is required. Each section should consult an insurance broker with knowledge of strata corporations and sections, and review the sections bylaws as necessary to evaluate insurance needs.

Whether it is a strata with sections, a commercial strata corporation, a residential bare land or residential-detached strata, or a strata corporation as part of an Air Space Parcel agreement, I am surprised at how frequently the CHOA staff encounter strata corporations across B.C. that are not properly insured.

There are often hidden obligations in easements, shared-use agreements for facilities and obligations under Air Space Parcel agreements that are overlooked and never addressed until a major incident occurs. Proactive engagement of your broker is the first step. Don’t make any assumptions. Confirm all information in writing and consult with your lawyer to verify the insurance placed meets the needs of your type of strata lots and sections.

Tony Gioventu, Executive Director CHOA

Tony Gioventu is executive director of the Condominium Home Owners Association. Email [email protected]

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Condo Smarts: Strata insurance covers original finishing, not improvements

2012-Tony-Gioventu.jpgDear Tony: I run a small retail business out of a commercial strata lot in downtown Kelowna. Our building is mixed use and divided into two sections between the residential and commercial units.

 

We had a water claim in our building over the summer that affected several residential units and two commercial units, including mine. The insurance claim covered the residential units and their interior finishing but did not cover our improvements of which we had invested a significant amount of money. We were of the understanding that the finishing within strata lots, whether they were commercial or residential were covered under the strata policy so we had not purchased any additional insurance and are now left with over $75,000 in costs of restoration.

Could you please explain exactly how strata corporation insurance works for sectioned strata corporations?

Martin W.

There is often confusion of the terms of the Strata Property Act which create misunderstandings around operations and liabilities for mixed use properties. Whether your strata lots are residential or non-residential (commercial) either in mixed use or as entire commercial entities, the Strata Property Act and Schedule Standard Bylaws and Strata Property Regulations apply.

The term “tenant” that is used within the context of the Act applies both to residential tenants and lease hold or commercial tenants in the same fashion, with the exceptionthat a strata corporation cannot restrict the rental of commercial strata lots.

Under the requirements of the Act, a strata corporation must insure for all original common property, assets and fixtures that were installed by the owner developer. This will basically include all the original finishing; however, the original finishing does not include lease hold improvements in commercial strata lots or improvements or betterments in residential strata lots. The leasehold improvements that you installed were not part

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Contractors Insurance Method

Contractors insurance is introduced as most of the people in the world are performing contract oriented business. If you were a business owner you have to check with the contractors whether they have taken this insurance coverage. As a contractor it is essential to take contractor’s insurance because there may be some damage happening to the owner’s property with or without your knowledge, using this policy you can cover it.

Contractors insurance is essential for all contract persons who offer services to the other companies. If you are working in a company and have taken the contractors insurance, then the company would have no problem if any damage or problem arising in the future. Especially for the government contracts, there won’t be a question of asking you to supply the goods, if you own the contractors insurance.

This insurance has three parts associated with it. All the parts completely protect the damage which will be produced in the future. The contractor is susceptible for liability in medical, legal and compensation costs.

This type of insurance doesn’t cover two possibilities. They will not cover the negligent and deliberate mistakes that has occurred. Besides it, it is comprehensive in all costs. The policy also covers property and equipment liability to a large degree. If you want a large coverage based upon the large turnover attained, you can opt for a separate coverage.

This type of insurance is mainly introduced for the benefit of the company owners when the contractors make a mistake and due to it some of the goods may be subjected to damage. There is no need to worry about the claims for the damaged products.…

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