Condo, Coop and HOA Master Insurance Premium


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There are many things which come together to make for a successful business enterprise. These things are conveniently divided into four key managerial
segments or functional areas of business including the production, marketing, human resource development and finance.

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Condo, Coop and HOA Master Insurance Premium

  1. 1. ==== ====The Truth About Managing Change: ====Im sure that a lot of condo/coop & HOA board members have the following question: how comeon my Automobile & HO-6 Insurance policies I pay the premiums directly to the insurance carrier,and I have the option of monthly installments, whereas on the condo/coop or HOA masterinsurance policy I have to pay the premiums to my agent or broker, and the premium has to bepaid in full upon binding of the policy and if I cant afford to pay it in full then we have to getpremium financing? Thats a very good question, and it all comes down to 2 main ways thatinsurance premiums are being charged:Direct BillAgency BillDirect BillMost personal lines insurance policies, including personal automobile insurance, homeownersinsurance, renters insurance and personal umbrella insurance are direct bill. This means that theinsurance carrier is billing the policy holder directly. Most personal lines insurance policies comewith the option of quarterly or monthly installments, youll have to pay a down payment (usually20%) upon binding, and the rest will be split up to quarterly or monthly installments. In most casesyoull be charged a small fee for every installment anywhere from $1 to $6 depending if you set upautomatic withdrawals from your bank account. Once the policy is in effect, the agent or brokerhas nothing to do with the billing of your insurance policy (of course hell get a notice ofcancellation if you dont pay your premium and call you up to make sure that youll make apayment so your policy shouldnt cancel). This is why on all your personal insurance policies youpay the insurance company directly and you have the options of installments.Agency BillBut when it comes to your condo/coop or HOAs master insurance policy its a whole differentstory. Most condo/coop or HOA policies are agency billed, this means that the insurance carrier isbilling the insurance broker the full policy premium, and the broker has to bill the condo/coop orHOA association. The broker usually has 30 to 90 days to pay the full premium to the insurancecarrier. This is the reason why you pay the insurance premiums to the insurance agent or brokerand why it has to be paid in full. But what if your condo/coop or HOA association cant afford topay the whole premium at once?Premium Financing
  2. 2. Most condo/coop or HOA associations dont have extra money lying around, so when your policypremium is more than $20,000 its kind of hard to pay the full amount up front, thats whenpremium financing comes in to play. Your insurance broker should help you out with the premiumfinancing; there are a lot of good financing companies out there. The interest rates are usuallybetween 6 & 10%. They will only finance about 80% of the premium, which means that youll haveto pay about 20% upon closing. How does the whole financing process work? The financingcompany sends a check of the full premium (minus your 20% down payment) to the insurancebroker. Then the insurance broker sends to the insurance company the down payment that he gotfrom the condo/coop or HOA and the check that he got from the financing company (minus hiscommissions). Then the financing company is going to bill you monthly or quarterly with a 6 to10% interest rate. The following is something that unfortunately happens quite often: The insuredmade sure to have the policy paid up in full, whether by paying the full amount or by gettingpremium financing, and after a few weeks they get a notice of cancellation in the mail. Whathappened here? Very simple, your broker received the full amount, now he has up to 60 days topay the company, and very often brokers neglect or on purposely delay paying the insurancecompany right away. This is wrong and illegal and you should stay away from such insurancebrokers.Izzy Green, CEO and co-founder of Evergreen Insurance, In working with real estate owners andmanagers, Izzy saw a need for a company that understands the needs of not only genericinsurance products but insurance for real estate owners, managers and board members. Hissuccess in real estate and insurance gave him the natural competitive edge in addressing thoseneeds and so Izzy and his partner launched Evergreen Insurance that specializes exclusively inreal estate insurance and nothing more. Evergreen fast became leader in real estate insuranceand Mr. Green is considered a leading expert in real estate insurance among board members andmanaging agents. Izzy writes articles on real estate insurance and is a regular contributor toleading publications and also gives educational seminars to board members, managing agentsand insurance firms.Article Source: ====The Truth About Managing Change:
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