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I read an interesting story about the Building master insurance policy at the Marco Polo. From what I read: A few years ago there was a smaller fire in the building on the 8th floor that caused $1.1 million in damages. Their master insurance policy covered the damage but then decided not to renew the policy.
Apparently the HOA then had a very difficult time finding ANY company to provide a master policy for the building. In the end, a group of several companies finally agreed to collectively cover the risk. That was after a $1.1 million fire.
The big concern for the building is what happens if the current carriers don't renew. If they had so much trouble after the $1.1 million fire and now have a $100 million fire just a few years later, will any carrier agree to insure the building going forward.
And what happens to the value of the units if they can't get a master policy on the building ? My guess is that no carrier will agree to provide insurance going forward unless they install a sprinkler system. So they will need to assess each unit to get the system fully installed quickly so they can get insurance to cover the building forward. But that's just a guess on my part.
I thought this possibility of not getting being able to find a carrier was interesting and I hadn't thought about this issue.
There will be someone to insure it, its always a question of at what cost. From what I understand, the insurance companies have contracts and agreements among themselves to limit their losses from any one event. And the $100mil probably encompasses all the damage including personal possessions, not just the master policy. So the claim against the master policy is probably quite a bit less. I know people at the companies involved with the insuring of the condo, and probably could get more specific details, but I really don't care to, as it doesn't matter to me.
Even though the fire is $100 mil, the group of carriers may take upon $5 mil each (for instance), and anything higher is offloaded to mainland companies to cover the rest. Because the companies are taking the first (say) 25mil in damages, and normally it's unlikely that damages would go higher than that, large mainland insurers/investors would be willing to take the rest of the risk for a portion of the insurance premiums. Similarly to owning a stock market mutual fund, the companies diversify their risk so any 1 event or company bankruptcy won't cripple you.
So the carriers themselves aren't taking the $100mil beating, but the condo will be substantially more expensive to insure in the future, and it's likely that rates will go up for all condos across the island as well.
Location: From Sunny Honolulu to Rainy Puget Sound Area
361 posts, read 398,103 times
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Quote:
Originally Posted by WaikikiBoy
Interesting. If she barely made it out alive, then I'd think she could pretty easily shed light on how the fire started.
Yes, I am pretty sure that girl (she's actually a young adult, age 29) who "barely escaped" unit 2602 KNOWS what started the fire.
I am guessing that her parents, Jere and Dale Gearhart, have both hired an attorney, and keeping their mouth shut due to liability issues that will arise from this incident. Their names are both listed as owners of unit 2602 according to the Honolulu C&C property website.
I hate to jump to conclusion, but either she was cooking up some meth, and that may have started the fire. Or there was something going on that dealt with gasoline, as residents of neighboring units smelled gasoline and strange odors prior to the fire alarm sounding.
Fire investigators and ATF are still investigating this incident and what the cause of the fire was. It may probably take another month (or more?) before the fire investigators release their findings (if any) to the media.
I just feel bad for the surviving family members of the victims who died in this tragedy.
Location: From Sunny Honolulu to Rainy Puget Sound Area
361 posts, read 398,103 times
Reputation: 317
Quote:
Originally Posted by WaikikiBoy
I read an interesting story about the Building master insurance policy at the Marco Polo. From what I read: A few years ago there was a smaller fire in the building on the 8th floor that caused $1.1 million in damages. Their master insurance policy covered the damage but then decided not to renew the policy.
Apparently the HOA then had a very difficult time finding ANY company to provide a master policy for the building. In the end, a group of several companies finally agreed to collectively cover the risk. That was after a $1.1 million fire.
The big concern for the building is what happens if the current carriers don't renew. If they had so much trouble after the $1.1 million fire and now have a $100 million fire just a few years later, will any carrier agree to insure the building going forward.
^^ LOL! I am guessing that the insurer of Marco Polo will NOT renew their insurance coverage.
But I don't know, because I'm not the insurance company. However, this fire incident relates to a damage incident I had for one of my rental houses back in Hawaii. Stupid former tenant broke one of the bathroom sink pipes and that pipe leaked water all over the bathroom, hallway and living room floor. The brand new laminate floor that I had installed were all soaked with water, had blisters, and had to all be replaced! Damage came out to be around $9000.
Come this year around May, State Farm refused to renew our home owner insurance policy.
I had to freaking fish around for other insurance companies to insure that house.
Luckily I found one insurance company via my mom's friend, that decided to insure that rental house.
However, as for Marco Polo apartment, since they have had a previous fire four years ago, and the board members failed to make corrective measures to the entire apartment complex, I doubt their current insurer (I believe it's First Insurance) will not renew their policy with Marco Polo.
I appreciate that sprinklers are not being required of condos built before 1975. Quite frankly, while a noble idea, it is too cost-prohibitive and buyers knew what they were/are getting into when they moved into these buildings. My building does not have sprinklers and, quite frankly, does not need them. The building is only 15 stories and has a fire hose on every floor. Likewise, the layout of the building makes it easy for firefighters to combat any blaze; a unit caught fire on the 9th floor in 2014 (it was pretty serious) and was completely extinguished in 45 minutes, with no damage to surrounding units. All requiring such for buildings like mine would do is needlessly increase owner's expenses (probably seen through HOA fees).
As to the OP in general, I don't know why HOA fees are so high, at least not at my building. Indeed, several long time security guards have left us in the last year and were replaced by new guards who are paid the lower starting salary (salaries are the biggest expense for my building). Yet the fees keep on increasing.
I appreciate that sprinklers are not being required of condos built before 1975.
As to the OP in general, I don't know why HOA fees are so high, at least not at my building. Indeed, several long time security guards have left us in the last year and were replaced by new guards who are paid the lower starting salary (salaries are the biggest expense for my building). Yet the fees keep on increasing.
Right off the bat - your fees are high because your building is so old.
Right off the bat - your fees are high because your building is so old.
My building is old but well-maintained. The fees are high because they cover water, sewage, cable, rooftop pool and recreation areas, daily grounds and building upkeep, insurance, and 24/7 security staff. Indeed, an older building (and one that actually looks its age . . . my building looks like it was built in the late 1990s . . . they really do a good job with upkeep) across the street from mine has considerably lower fees, but they also offer less. My bewilderment with the fees has less to do with overall cost of the fees (perhaps I could have been clearer), and more to do with the fact that they continue to increase despite the changes to staffing. For context, my monthly fees are $750 for a 2 bedroom.
I guess I should count my blessings, though. I have a friend who just bought a one bedroom in an older building and who is paying $1,000 a month in fees.
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. . . my building looks like it was built in the late 1990s . . . they really do a good job with upkeep) across the street from mine has considerably lower fees, but they also offer less. My bewilderment with the fees has less to do with overall cost of the fees (perhaps I could have been clearer), and more to do with the fact that they continue to increase despite the changes to staffing. For context, my monthly fees are $750 for a 2 bedroom.
