Exploring Alternative Options for Condo Master Policy
As a member of the Board of Trustees for a small self-managed condominium community, we’ve always valued our relationship with our current insurance agent from a local brokerage. They have been instrumental in helping us craft our existing policy. However, after experiencing a significant rate increase and being warned that next year’s rates might rise even further—despite having no claims—I’m concerned about securing the best value for our community.
To address this, the current Board has decided to reach out to another local agency for comparative pricing. We’re also in discussions with our existing agent to explore potential strategies for reducing our rates or at least preventing another substantial increase in the future.
However, some former trustees have expressed strong objections to this approach. They claim that it would be “highly unethical” to share our current policy with another agency and argue that we have “no good reason” to look for alternatives. They also seem worried about possible repercussions from our current agency for considering other options.
This raises an important question for me: Are these concerns warranted, or are the former trustees overreacting? I would especially appreciate insights from insurance professionals on this matter. Thank you!
It’s understandable that you’re facing pushback from former trustees regarding the decision to shop for new insurance quotes. In general, exploring options for insurance is a standard practice, especially when facing significant rate increases, and it can be beneficial for your community to ensure you’re getting the best coverage at a fair price.
Ethics of Sharing Information: Sharing your current policy details with another agency for a comparative quote is a common industry practice, provided you have the authority to do so. It’s part of due diligence to ensure you’re not overpaying for coverage. However, it’s essential to review your current contract with the insurance agency to ensure there aren’t any clauses regarding confidentiality or exclusivity.
Price Hikes: The reaction from your former trustees may stem from a misunderstanding of the insurance market dynamics. Rate hikes can happen for various reasons beyond your claims history, including market fluctuations, changes in underwriting guidelines, and broader economic conditions. Shopping around could help identify more competitive options.
Retaliation Concerns: While there’s a possibility that your current agent might not be pleased with your decision to seek other quotes, it’s unlikely that this would lead to any significant retaliation. Agents understand that clients may look for the best value, and many work hard to retain business when approached for competitive pricing.
Transparency with the Board: It may help to address the concerns raised by the former trustees by having an open discussion among the board. Share your reasoning and ensure everyone understands the rationale behind shopping for quotes. This transparency can help alleviate fears and ensure a united front.
Legal Considerations: If you’re uncertain, it might be wise to seek legal counsel or consult with a professional insurance broker who can provide specific guidance on your current situation.
Ultimately, it’s your duty as part of the Board of Trustees to act in the best interest of the condo community. If shopping for quotes can lead to better pricing or services, it’s a responsible move. Engaging in competitive review is part of good governance, as long as it’s done ethically and transparently.