Condominium insurance can be complex, with different coverage responsibilities and regulations depending on the state in which you reside. In general, a condominium owner’s insurance policy will provide coverage for the interior of their unit, while the condo association’s insurance policy will cover the building’s exterior and common areas.

However, the specific details of insurance coverage can vary significantly from state to state. It’s important to familiarize yourself with the laws and regulations in your state, as well as your specific condominium association’s insurance policies, to understand what types of damages are covered and by whom.

Coverage

In general, condominium owners are responsible for insuring the interior of their units, including their personal belongings and any upgrades they have made to the unit. This insurance coverage is typically referred to as HO-6 insurance, which is a type of homeowners insurance policy that is designed specifically for condo owners. HO-6 policies can vary widely in their coverage, but they typically cover damage caused by things like fire, theft, vandalism, and certain types of water damage.

The condominium association, on the other hand, is responsible for insuring the building’s exterior and common areas, such as the roof, walls, hallways, and elevators. This insurance coverage is typically referred to as a master policy.  A Master Policy it’s designed to protect the building and the association from liability in the event of property damage or bodily injury.

Types of Policies

There are two types of master policies that a condominium association may carry: a bare walls-in policy or an all-in policy. A bare walls-in policy only covers the structure of the building, leaving unit owners responsible for any damage to their unit’s interior. An all-in policy, on the other hand, covers everything in the building, including the fixtures and appliances in each unit.

Even with an all-in policy, the association’s insurance may not cover certain types of damage, such as damage caused by floods or earthquakes. Unit owners should understand what their association’s master policy covers and what they are responsible for covering themselves.

In some states, the laws and regulations regarding condominium insurance can be particularly complex. For example, in Florida, condominium associations are required to carry insurance that covers the full replacement value of the building, including any upgrades or improvements made by individual unit owners. This requirement can make insurance claims more complex, as unit owners may need to provide evidence of their upgrades or improvements to the insurance company in order to receive compensation.

Using a Public Adjuster

A public adjuster can be a valuable resource for condominium owners who need assistance navigating the complex process of filing an insurance claim. Public adjusters are licensed professionals who work on behalf of policyholders to help them maximize their insurance claims. They can help with everything from filing the initial claim to negotiating with the insurance company.  This helps to ensure that the policyholder receives fair compensation.

Public adjusters can be particularly helpful for condominium owners, as they can navigate the complex rules and regulations surrounding condominium insurance claims. They can also help unit owners determine what is covered by their own insurance policy and what is covered by the association’s policy. Public adjusters work with both the unit owner and the association to ensure that all parties are fairly compensated.

When working with a public adjuster, it’s important to choose a licensed and experienced professional who has a deep understanding of the insurance regulations surrounding condominium insurance claims in your state. Look for a public adjuster who has experience working with condominium owners and who has a proven track record of success in maximizing insurance claims.

In conclusion, navigating condominium insurance claims can be complex.  There are different coverage responsibilities and regulations depending on the state in which you reside. Condominium owners are responsible for insuring the interior of their units. The association is responsible for insuring the building’s exterior and common areas. It’s important for unit owners to understand what’s covered in their policies.

Contact Clarke & Cohen, Greater Philadelphia Public Adjusters, for your Condominium Insurance Claim at  (610) 668-0144

Co-insurance is a common concept in commercial property insurance policies. It’s an important aspect of insurance policies that can have a significant impact on the amount of a claim that a policyholder is able to recover. In this blog, we’ll discuss what co-insurance is and how it applies to commercial property claims.

What is Co-insurance?

Co-insurance is a term that refers to the percentage of an insured property’s value that the policyholder must insure in order to be fully covered in the event of a loss. It’s essentially a requirement that policyholders insure their property for a certain percentage of its value, typically 80% or 90%. If the policyholder fails to meet this requirement and the property suffers a loss, the insurer may reduce the amount of the claim payout by the same percentage that the policyholder was underinsured.

How Co-insurance Works in a Commercial Property Claim

Co-insurance applies to commercial property insurance policies in the same way that it applies to other types of insurance policies. In a commercial property insurance policy, the policyholder is required to insure their property for a certain percentage of its value, typically 80% or 90%. If the policyholder fails to meet this requirement, they are said to be underinsured.

When a loss occurs, the insurance company will calculate the amount of the loss and compare it to the insured value of the property. If the policyholder has met the co-insurance requirement and insured the property for the required percentage of its value, the insurance company will pay the full amount of the claim, up to the policy limits.

What if you’re Underinsured?

However, if the policyholder is underinsured, the insurance company will apply the co-insurance formula to the claim payout. The co-insurance formula is used to determine the amount of the claim payout. This is based on the percentage of the property’s value that was insured. In its simplest form, the co-insurance formula is the amount of insurance carried on the property divided by the amount of insurance required, multiplied by the amount of the loss. For example, if the policyholder insured the property for only 70% of its value, the insurance company would reduce the claim payout by the same percentage, paying out only 70% of the claim.

Let’s say a commercial building has a value of $1 million and the policyholder insured the property for only $600,000. Assume the insured is required to insure the property for 80% of the replacement value and the building suffers a loss that results in $500,000 in damages. Then the insurance company will use the co-insurance formula to determine the amount of the claim payout. In this case, the claim payout would be reduced by the same percentage that the property was underinsured, which is 25%. Therefore, the policyholder would only receive a claim payout of $375,000, or 75% of the total amount of the loss.

Why Co-insurance is Important in Commercial Property Claims

Co-insurance is an important aspect of commercial property insurance policies because it helps ensure that policyholders are properly insuring their property. The co-insurance requirement is intended to prevent policyholders from underinsuring their property in order to save on insurance premiums.

Co-insurance can also have a significant impact on the amount of a claim payout in the event of a loss. If a policyholder is underinsured and suffers a loss, they may not receive the full amount of the claim payout that they expected. This can result in significant financial losses for the policyholder. And that’s why it’s important to properly insure commercial property and meet the co-insurance requirement.

In conclusion, co-insurance is an important aspect of commercial property insurance policies. It requires policyholders to insure their property for a certain percentage of its value, typically 80% or 90%. If a policyholder is underinsured and suffers a loss, the insurance company may reduce the amount of the claim payout by the same percentage that the policyholder was underinsured.

Contact Clarke & Cohen, Bala Cynwyd, PA Public Adjusters, in case of a commercial property insurance claim.

**Updated June, 2023:

~In April and May, our dedicated team joined forces with the American Red Cross of Southeastern Pennsylvania to bring safety and peace of mind to our community. Together, we made a significant impact by installing smoke detectors, creating personalized escape plans, and sharing vital fire safety information in underserved neighborhoods.
Many homeowners do not replace smoke alarm batteries frequently enough, allowing existing batteries to die. We see residential fires every day and these new 10 year batteries will save lives!

We’re deeply committed to making a lasting difference and ensuring that everyone has access to the necessary resources and knowledge to keep themselves and their loved ones safe.
The numbers speak for themselves – a staggering 906 homes are now safer thanks to the “Sound the Alarm” program! We are honored to have been able to contribute to this life-saving initiative and extend our heartfelt gratitude to our partners at the American Red Cross for giving us the opportunity to volunteer and support this important cause.

Stay tuned for more updates on our ongoing efforts to create a safer community and empower individuals with invaluable fire safety tips. Together, we can make a real impact and build a stronger, more resilient neighborhood.

~On January 16, 2023, in honor of MLK Day of Service, the Clarke & Cohen team volunteered for the American Red Cross, installing free smoke alarms and sharing safety information to several Frankford area neighborhoods.

The American Red Cross of Southeastern PA program “Sound the Alarm, Save a Life” rallies volunteers to install free smoke alarms and share safety information within at-risk communities.

The volunteer team, including Clarke & Cohen, installed 198 free smoke alarms, made 88 homes safer, and served over 240 community members.

Home fires claim 7 lives every day, but having working smoke alarms can cut the risk of death by half.

About the American Red Cross of Southeastern PA:

The Southeastern Pennsylvania Region of the American Red Cross serves approximately 4.2 million people in Philadelphia, Bucks, Chester, Delaware and Montgomery counties. Our region provides food and shelter in emergencies, assists members of our armed forces and their families, teaches lifesaving skills, collects lifesaving blood, and so much more. All American Red Cross disaster assistance is free, made possible by voluntary donations of time and money from the American people. The American Red Cross “Sound the Alarm, Save a Life” rallies volunteers to install free smoke alarms and share safety information within at-risk communities throughout the United States.

About the Clarke & Cohen Foundation:

Providing support for fire protection to underserved residents of Philadelphia and the surrounding areas.  Clarke & Cohen is a public insurance adjuster and property loss consultant in the Philadelphia, South Jersey, Delaware and surrounding areas.

Home type is critical to determine the structural viability of homes after a fire.

Fire damage is the No. 1 insurance loss category nationwide and 80% were in residential structures. Kitchens are the prime location of origin. Commercial fire loss evaluation involves structural inspection and testing of wood, steel, concrete and masonry materials. Insurance carriers are seldom inclined to pay for post-loss structural testing and will attempt to settle claims based on visual observations. In extreme loss situations (i.e., “total loss”), this may be acceptable, but, in many cases, there is partial fire damage linked to the structural system. This article will share insight on the structural test procedures for evaluating fire loss claims and focus on coverage dispute issues as they pertain to insurance assertions of preexisting damage.

Forensic Engineer Fire Evaluation

Fire losses account for approximately $22 billion^{Display footnote number:1} in 2020, with 3,500 civilian deaths. Forty percent of these losses were structure-related fires and the death toll is 64% attributed to residential one- and two-family dwelling units.

The 2020 estimate of 11,900 residential fire injuries was 44% lower than the 21,100 in 1980.

These facts point to the idea that the most dangerous place for fire deaths is at home, most likely due to fires originating in the kitchen area. Structure types drive these statistics. There are five categories of structures: Type I, II, III, IV and V. Each type is based on its resistance to fire. Type I and II are deemed the highest resistance with Type V the lowest. The simple definition is Type I and II are broadly classified as providing three- to four-hour fire ratings with materials of concrete, fire retardant encased steel and reinforced masonry. Type V buildings are wood-framed construction. Type IV is “heavy timber” construction which, although wood, has better fire resistance than conventional wood framing.

Of 195 countries in the world, the United States is the largest (perhaps only) purveyor of wood framed buildings that comprise 75-80% of our total floor space. All other countries, especially industrialized nations of the G7, use Type I, II and III construction. Even “developing countries” (Brazil, India, Mexico) rarely use Type V construction. This author is not an advocate for wood-frame buildings in areas that are susceptible to large fire loss. Think of California and the wildfires. Why does the fifth largest economy in the world rely on wood for their residences in wildfire zones? This is a mystery.

 

Figure 2: Excerpt from NFPA Report for 2020

For insurance adjusters, the tools to evaluate a fire loss and determine coverage are critically important. Insurance adjusters seek two critical objectives:

1. Determine the full scope of the fire loss.
2. Value the fire loss and reconstruction scope of work.

Insurance carriers may conduct these investigations with “traditional methods” of empirical valuation mixed with limited testing. Tests cost money, but they bring analytics to the insurance valuation process, which adds value to the process of estimation and scientific accuracy, which is necessary in the 21st century.

Four materials constitute civil engineering for the past 5,000 years: masonry, concrete, steel and wood. There are new versions of materials such aluminum, fiber composites, post tensioned concrete, etc. But these four basic materials are the building blocks of our civilization and wood is responsible for 75% of our building space in the United States. How should insurance adjusters approach fire loss evaluation?

I. Investigation

Fire loss investigations invest resources, time, testing and apparatus to determine the cause, origin and structural damage. For structural evaluations, a few tools beyond the visible eye are useful. These include both non-destructive testing (NDT) and destructive testing (DT) methods to assess the residual strength of materials.

Steel structures: NDT methods are X-ray, Ultrasonic Testing (UT) to examine the welds and bolts. Steel has a melt point of 2,600 F, and the fire proofing will last usually less than one hour. It’s imperative to examine residual strength of materials after the fire.

Masonry/Concrete structures: NDT methods are Schmidt Hammer for concrete compressive strength. DT methods are core extraction followed up with petrographic examination. NDT and DT methods will provide evidence of the remaining structural capacity and heat effects on steel reinforcement.

Wood structures: Wood requires testing in a lab by extracting samples (DT). Charring of wood members usually indicates lack of reuse and this impacts the replacement cost because code issues will raise the bar for the new design. Code upgrade is the most significant impact on Type V structures post-fire loss.

II. Structural Engineering Analysis

The structural redesign of the post-fire loss building must consider code upgrades, whether this is part of the coverage or not. The design engineer for the reconstruction must include this in their scope of work, although it may be separated out for cost valuation purposes. Certain carriers will demand that code upgrade design be excluded in the reconstruction plans purposely unless the building department demands them. This is an incorrect approach because the building authority is not the responsible party and is not liable to the owner for missing design elements that are required by code. The engineer of record is the responsible party and must include all design elements to satisfy the building code, whether the building department asks for it or not. Conflicts often arise on this point and insurance adjusters should be aware of this critical step.

III. Reconstruction Engineering with Cost Valuation

The reconstruction plan should follow through from Phase I and II to include all fire loss related items, code upgrade features and may trigger additional requirements that are required for the building permit. A few peripheral items that get triggered are the Americans with Disabilities Act (ADA) requirements that can be expensive, time consuming and require additional resources. ADA is a critical element on all post-loss reconstruction plans. Fire sprinklers are usually triggered in the reconstruction process. Upgrades to new roof materials and fire-retardant wrapping that was not in the original design may become cost additions.

Reconciling these additional costs with the insurance policy coverage is a prime challenge for insurance adjusters. Owners need to budget for the “true reconstruction” with building code upgrades, better materials, ADA, fire sprinklers and other elements that may not be covered under the policy but which they must pay for. It’s not the conversation anyone wants to have but needs to be done upfront and reconciled before the project starts, rather than surprising our clients with these additional expenses.’

Reprinted with permission from Napia.com.

Contact Clarke & Cohen for help with your property loss claim.

Reference

Follow these tips to make sure you get your due

“Once you’re out of harm’s way following a big storm, the hard work of restoring your home—and your life—begins. And the sooner you reach out to those who can offer assistance, the sooner relief will come your way.”
View the full Consumer Reports article written by Tobie Stanger HERE. 

Reprinted with permission from Napia.com

What makes a coverage factor hidden?

Every professional that handles first party property claims is taught this simple and indispensable fact: an insurance policy is a contract. Contracts should clearly set forth the terms of the agreement in writing, so that duties and performance for each party are (reasonably) known and can be dutifully taken into consideration.

In a policyholder’s mind, their insuring agreement is a shield or a safety net that hedges against fortuitous risk. Simply reading their policy should give the policyholder an opportunity to reasonably determine possible coverage gaps. However, in my work as a public insurance adjuster advocating for policyholders, I have found many risks to coverage that are hidden or disguised. I consider coverage factors hidden when they are challenging or nearly impossible for a policyholder to have access to, or be aware of to assess coverage pre- or post-loss.

The following examples contribute to a large share of claim issues or disputes, often to the detriment of the policyholder.

“Most insurers will refuse to release a copy of their claims handling guidelines to a policyholder, in some cases even resisting discovery requests for them in litigation. This is concerning, as the idea of the insuring agreement is that both parties can reasonably determine coverage, per the contract.”

Hidden in plain sight: coverage factors before a claim

Most states require policies to be written in plain language, with some statutorily employing the “Flesch scale analysis readability score” as a guide. Even with these well-meaning requirements, I have had attorney policyholder clients who found understanding their policy and coverage a challenge, as property insurance was not within their law practice. Many policyholders do not possess the base knowledge necessary to truly understand their policy. I haven’t heard of insuring basics being taught in school, without being a part of an insurance-related degree, have you?

In addition, insurer advertising is a primary source of policyholder insurance education. The focus of most of these advertisements are: “Save money on premiums!” and “We’ll protect you!” I certainly never thought to read a policy until I entered this profession. “I never thought to read my policy. I don’t know why!” is something I hear from most of my policyholder clients. After all, who would even think to read their policy or assess possible coverage gaps? They have the safety net they were promised through hundreds of hours of insurer advertising and possibly saved money on their premiums.

All of this can lead to coverage factors before a claim being hidden in plain sight.

I recently reviewed a premium discount offer from a policyholder’s insurer. It was titled “Impact-Resistant Roof Discount.” According to the letter, if they replaced their current roof with an impact-resistant asphalt shingle they would receive “a premium discount.” The letter did not state what the actual premium discount would be, nor was there any phone number or suggestion in the letter of who to contact to find out: only “Sign and mail your forms to the address above or fax them to …” The policyholder called the insurer’s customer service number they found online and learned that the discount would be $220.23.

In order to get this discount, the letter stated:

“How do I get the discount? If you have an impact-resistant roof, you must submit the following form(s) we’ve included to get the discount: […]

Cosmetic Damage Exclusion form (Do not return this form if your property is in Kansas, Indiana, Louisiana or Virginia). By signing this form, you agree that in return for the discount, you will not have coverage for cosmetic loss or damage that’s caused by hail and alters the appearance of the roof covering. You will have coverage for hail damage that allows water to penetrate the roof covering.”

Cosmetic damage exclusions are an increasing coverage gap and are becoming a large source of claim disputes and litigation. Shortly after my review, the policyholders paid $17,262.19 for their planned, retail roof replacement, but they did not move forward with the policy discount offer. It would have meant accepting a $220.23 discount for a possible $17,000.00 or more coverage gap. The policyholder told me: “We wouldn’t have known to even check this if our neighbor hadn’t referred you, Sarah!”

Now that we’ve covered a pre-loss example of a hidden or disguised coverage factor, let’s dive into the claims process.

Are claims handling guidelines best practices or disguised extra-contractual coverage limitations?

Claims handling guidelines are an insurance claim department’s playbook. They can be a way to standardize claim handling and coverage decisions, especially when faced with external variables to coverage that may not be directly addressed in the policy.

On the one hand, standardization can be a good thing, lending to consistency in treatment of policyholder clients, lessening the burden and time spent making decisions and — hopefully — general operations efficiency. Yet, claims handling guidelines can be used to wrongfully deny or underpay claims in conflict with the coverage provided by the policy terms. When this happens, claims handling guidelines can arrest and inhibit the proper application of the basic tenet of all property insurance: indemnity.

Per one insurer’s claims guidelines, they will under no circumstances provide coverage in hail and wind losses for pre-loss reasonable uniform appearance, age or condition for an asphalt shingle roof unless the roofing material is discontinued and no longer available. These guidelines do not have the same restrictions for other, much more costly exterior items. These seemingly arbitrary coverage determinatives are not present within in the policy. Most insurers will refuse to release a copy of their claims handling guidelines to a policyholder, in some cases even resisting discovery requests for them in litigation. This is concerning, as the idea of the insuring agreement is that both parties can reasonably determine coverage, per the contract. Why is it acceptable for an insurer to use hidden coverage determinations, unilaterally or arbitrarily? This is a common occurrence in property insurance claims nationwide.

Hidden coverage wildcard: adjuster training

Adjuster training is an increasing threat to coverage. Having worked alongside many different insurers, I have found great variance when it comes to the effort each invests in training its adjusters and claims staff. This could be one of the more confounding hidden coverage variables for policyholders, and insurance and legal professionals alike.

For most states, public and independent adjusters are required to be licensed, and to complete pre-licensing training that includes the basics of contract law, and principles to follow when determining coverage for a claim. Insurance company staff adjusters are not required to be licensed in many states, and therefore it is not known if they receive the same training that pre-licensing requirements cover. To illustrate my concern, here is a quote from a phone conversation I had with a staff adjuster, who was in a call center over a thousand miles from my client’s loss: “I don’t know about your state’s claim handling laws, and I don’t need to read the policy. My job is to follow the claim guidelines.” This has happened more than once.

Considering what we’ve covered so far — lack of policyholder knowledge and possible misapplication of claims guidelines — how do we know if coverage is properly determined in a claim if both the adjuster and the policyholder lack the necessary training for this complex subject?

Conclusion

Hidden coverage factors are by no means new in claims adjusting, and nor are the disputes that can arise from them. The reality that these are in fact evolving factors, increasing in occurrence, lends to the exploration that these are directly and intentionally influenced. I feel that the outcomes of these are unfairly detrimental to policyholders based on the number of wrongful claim denials and inadequate settlement offers I successfully overturn in my work.

While there is perhaps no immediate remedy to these hidden coverage issues, public awareness is a good start. The coverage battles at hand are currently cloistered with the professionals engaged in them. They break the surface for public view occasionally in news headlines, only to be drowned out and forgotten within the soothing messaging of insurer advertising.

These evolving hidden coverage factors, ever-increasing premiums, and new exclusions and limitations are resulting in record diminution of coverage. The benevolent insurance safety net we are conditioned to believe in, and give our uncompromising trust to, could very soon be on its last threads.

By Sarah Parker

Reprinted with permission from Napia.com

Original article

Contact Clarke & Cohen with questions about your property insurance claim/policy.

Pop Up On Margate Beach To Raise Funds To Protect Neighbors From Fires

WHO: Clarke and Cohen Public Adjusters + Property Loss Consultants
WHAT: Invites the public to participate in Clarke and Cohen’s Annual Labor Day Beach Yoga Donation Class.

Clarke and Cohen Hosts Second Annual Beach Yoga Donation Class

Liza Jayne Cohen will lead a 50-minute All Levels yoga flow on Douglas Avenue Beach in Margate.
There is no fee for the class.

Donations will provide smoke detectors to distressed communities.

WHEN: Saturday, September 3 at 9:30 a.m.
WHERE: Douglas Avenue Beach, Margate
DETAILS: Please bring a towel or mat and water.

Click here to Rsvp.

WHY: Established in 1921, Clarke and Cohen is a fourth generation, family-owned Philadelphia based public insurance adjusting firm.  The Cohen family, led by Rich and his son Brett Cohen and nephew Blake Zucker are public adjusters and property loss consultants with decades of experience successfully managing complex residential and commercial claims in the Philadelphia region, South Jersey including the Jersey shore, and throughout the country.
The team has helps clients manage stress, grief and anxiety as they work tirelessly to recover the property that the client has lost.
Rich Cohen developed the Beach Yoga event as an annual way to bring together the community for a peaceful way to destress and support good causes that are important. The inaugural event in 2021 raised money for the Glioblastoma Foundation.
This year, we are raising money to provide smoke detectors to distressed
neighborhoods.
Liza Jayne Cohen is Rich’s daughter and is a certified yoga instructor who visits family on the holiday weekend.

For more information about Liza Jayne Cohen please visit
www.emeraldsunyoga.weebly.com/liza-jayne.html.
For more information about Clarke and Cohen please visit clarkeandcohen.com, or @clarkeandcohen on
Instagram, and @ClarkeandCohen on Facebook/LinkedIn

CONTACT: Questions + to reserve your spot, please contact coriemoskow@glosspr.com