June 23, 2025 • 31 mins
Yes, really, there’s finally good news about HOA insurance! Robert and Kevin unpack it in this week’s episode.
✅ Is a Reserve Study right for you? 👉 https://www.reservestudy.com/
You read that right, there’s finally some good news about HOA insurance! In this episode, Robert and guest Kevin from share recent developments that might positively impact your HOA’s coverage options. They break down what’s shifting in the insurance market, how boards can take advantage, and what this means for your next renewal. It’s not all doom and gloom (Really)!
Chapters:
00:00 What’s Happening With Insurance Claims Right Now?
02:10 Why Kevin Thinks There’s “Good News” in Insurance
04:00 How Quiet Disaster Seasons Affect Premiums
05:35 Are Lower Losses Creating Insurance Stability?
07:10 Why You Should Still Expect Premium Increases
08:30 What Role Does Risk Management Play?
10:20 What Reinsurers Are Really Worried About
12:10 Why HOA Loss History Impacts Rates So Much
14:00 What Boards Need to Understand About Deductibles
16:00 What Does “Capacity” Mean in the Insurance World?
18:00 Will Insurance Rates Ever Go Down Again?
20:15 Why Preventive Maintenance Is a Powerful Tool
22:30 Can One HOA’s Loss Affect Everyone’s Premiums?
24:10 How to Have a Realistic View of Insurance Expectations
26:00 How Much Control Do HOA Boards Really Have?
28:00 What Homeowners Often Get Wrong About Coverage
30:15 Final Thoughts: Staying Proactive and Prepared
The views & opinions expressed in this program are those of the Hosts & Guests, intended to provide general education about the community association industry. The content is not intended to provide specific advice or recommendations for any individual or organization. Please seek advice from licensed professionals.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Kevin Davis (00:00):
Think they're gonna change in insurance. If the
(00:02):
claims are going down, itdoesn't matter as much, okay, if
I'm getting 10% less losses Ihad before, okay, okay. Versus
every year they go up, so everyyear they go up, and now I have
money in the bank, becauseinsurance really is about having
enough money in a bank to paywhen that disaster happens.
Because we can't predict it, butwe know when that has to happen.
(00:23):
We need enough money in thebank. So right now, an insurance
company has enough money in thebank to deal with today's
issues. They know that. Theyunderstand that
Announcer (00:31):
HOA Insights is brought to you by five companies
that car (00:34):
Association Insights & Marketplace, Association
Reserves, Community Financials,HOA Invest and Kevin Davis
Insurance Services. You'll findlinks to their websites and
social media in the show notes.
Robert Nordlund (00:47):
Hi, I'm Robert Nordlund from Association
reserves,
Kevin Davis (00:49):
and I'm Kevin Davis of Kevin Davis Insurance
Services. And this is the HOAInsights, where we promote
common sense
Robert Nordlund (00:56):
for common areas. Well, welcome to episode
111 where we're again speakingwith insurance expert and
regular co host, Kevin Davis, sohe can share some good news with
you. Want to make sure you haveall the right information at the
right time to make the rightdecisions for the future of your
association. This helps you ourpodcast audience, to be well
(01:17):
informed and to be well preparedfor the challenging work you do
leading your association. Lastweek's episode number 110
featured a great interview withRussell Muns of community
financials. He's a regular guestexpert on our show and one of
our podcast sponsors, and he wasspeaking about what to look for
in your monthly financialreports. So the numbers have
(01:39):
meaning now if you get yourmonthly financial reports and
they just look like numbers on apage and you have no idea what
they're saying or if they'reright or wrong, or what you
should do about them, make sureyou catch episode 110 now, if
you missed that episode or anyother prior episode, take a
moment after today's program Tolisten from our podcast website,
(02:00):
Hoa insights.org or watch ourYouTube channel, but better yet,
subscribe from any of the majorpodcast platforms, sure you
don't miss any future episodes.
Well, those of you watching onYouTube can see the HOA insights
mug that I have featuring acartoon that puts a smile on my
face. You can get mugs andthings like that from our merch
(02:21):
store, which you can browsethrough from our Hoa
insights.org website, or thelink in our show notes, you'll
find we have some great freestuff there, like board member
zoom backgrounds and somespecialty items for sale, like
the mug that I just showed. Sogo to our merch store, download
a free zoom background, thentake a moment, look around, find
(02:42):
the mug you'd like, and ifyou're the 10th person to email
me at podcast at reserves, a.commentioning episode number 100
and 11th mug giveaway, we'llship that mug to you free of
charge. We enjoy hearing fromyou responding to the issues
you're facing at yourassociation. So if you have a
hot topic, a crazy story, or aquestion you'd like us to
(03:05):
address, you can always contactus at 805-203-3130, or email us
at podcast at reserve study.comnow today's episode comes from a
question submitted by Tracy fromNaples, Florida, who said, what
can you tell us about insurancerates? When is the bad news
going to stop? So Kevin, bracingfor that question, what's this
(03:29):
good news that you want to sharetoday? Well,
Kevin Davis (03:33):
you know, it's fascinating. The first quarter
is over, and this is, this isMay, and we're looking and it's
very quiet out there. It's beenquiet. We had that major fire,
and we had a couple otherdisasters too that happened. We
had an earth major earthquakethat happened in Miramar, you
know. So we had a lot of thingsgoing on, but it's been quiet.
(03:53):
And when it's quiet, that meansis that this uncertainty, okay,
but it doesn't necessarily meanit's bad, because it was bad. We
were here in the news right nowthat insurance company paid X
number of dollars for the fire.
It made X number of but wehaven't heard anything from the
fires. We noticed 270, $5million economic losses from the
fire, biggest loss ever. But howmuch of that is insured? And
(04:18):
that's what we don't we haven'theard yet, and we don't know to
answer that yet. So it's May,and it's quiet out there. So
what I did was this, I startedlooking at all the claims that
we have, and we have about30,000 Community Association in
our office. Okay, so and wewrite all over the country, and
so we start looking, and startnoticing, in that first quarter,
we're seeing less claims thatwe've seen in the past. So this
(04:40):
time last year, our claim countis down. So when the claim
counts go down, and then all ofa sudden we recognize the fact
that over the past couple ofyears, the rates have gone up.
So you can't get better thanthat. I mean, rates are going
up, claims are down. You. Guesswhat happens is that that's the
profit for the insurancecompany. Yeah, that's profit
(05:03):
with insurance companies theright. What happens? Yeah, and
what happens when insurancecompanies have profit? Yeah,
what happens with insurance canhave profit is capacity comes
in. That means new people wantto come back in and guess what?
They want to write business. Idoubt what I'm doing right now
is just purely speculation. Thisis based on my years of
experience, and look reading thetea leaves and everything like
(05:25):
that. So most people willdisagree with me, but based on
just those two things, look, theclaims counts going down and
premium going up. We know thatcompanies are making money right
now. However, now this is themost important part of it. We
don't know about the firstquarter losses yet. We know we
(05:45):
haven't heard anything.
Normally, we hear things. Andthe second thing more important
is the tariffs. The tariffs willcreate major problems for
insurers, okay? And the mainreason why is because you got to
rebuild. You gotta get plumbing.
You gotta get wood from Canada.
(06:07):
You gotta get all therefrigerators and washers and
dryers and cars from China. Soyou're talking about a major
problem there for insurers thatcould cause a problem.
Robert Nordlund (06:19):
It's early, and you got me thinking about a
couple things. Number one,you're reminding me about, I
think it was high schooleconomics. High school was
great. You learned about themajor things, like what gravity
is, just the reality of thisworld that we live in, and the
economic reality of supply anddemand. And when you have profit
(06:39):
the insurance companies, there'sgoing to be more people who want
in on that, and so they're goingto come in and increase the
supply, because there's a thattightening of the demand when
there's not very many insurersthere. So they're going to
rebalance that. And when there'smore competition, because
there's more insurers, that'sgoing to bring the profits down.
(07:02):
And let's not talk about thecompanies now, but talk about
the premiums down. That's That'swhat that's good thing.
Kevin Davis (07:10):
And one thing is important. That's why the
tariffs are so important rightnow. If the tariffs go away,
then all of a sudden, now youwill see a big change, probably
by the third quarter,everybody's sitting tight.
Capacity is coming in, but thetariffs, the key, the tariff, if
they go away, then all of asudden, now you will see the
(07:32):
insurers coming in. Becauseright now, everybody's on hold,
because we don't know, but I amseeing things that says they're
ready to say, Okay, we want tobe competitive again. You know,
we want to write business again.
Rates are high enough now wherethe insurers are making money,
okay, as long as the tariffdoesn't kill us, or the fires
(07:54):
and the floods and the earth,all that kind of stuff doesn't
kill us. But even if they do,they're prepared for that. Now,
they're prepared. They they areaware of these disasters.
There's awareness is there. Sothey weren't prepared for the LA
Fire, if la fire is so uniquebecause of the wind and
(08:15):
everything that happened neverhappened before. So they are
scared of that, but they stilldon't know how much money they
are
Robert Nordlund (08:25):
have to pay obligated. Yeah, we hear these
big numbers, and you said 270, 5million, but I hadn't
appreciated that not all of thatis an insurable loss that the
insurers are going to have toshoulder. So it could be the
loss of, I don't know, thehillside, the greens, the
Kevin Davis (08:47):
vegetation the state owned. The city own it,
you know, yeah, it's just notinsuring.
Robert Nordlund (08:52):
Or the businesses that just aren't in
business anymore, they've moved,they've left, and that may not
have been insurable. There's somany things that so the
insurable number may be a lotlower than that, 275,
Kevin Davis (09:05):
or the wear and tear it takes on just getting to
work now, you know, if you can'tgo through those areas, you
know, is it those part ofeconomic loss too? It's just
interesting, yeah. So, yeah,that's that's not non insurable
loss. It's not insurableeconomic loss doesn't make it an
insurable loss. So right now,all the insurers are sitting
there and going, Okay, we lookedat that, what happened in
(09:27):
January and some of thedisasters, or some flooding and
things like that, and it didn'tcost us as much we thought.
Right now it may be more,because there's still things got
it we got to go through and thetariff days that it is, we just
see the claim counts are lower.
And that's the most importantpart of it. Is that for the
first time in about four or fiveyears, that first quarter of
(09:50):
this year is first quarter lastyear, the claim counts have
declined. That is such greatnews.
Robert Nordlund (09:58):
Just fascinating. So last I'm not
sure it was last time we spoke,or a couple times ago we spoke,
you were talking about how theinsurers were looking at their
loss history and loss history.
That sounds like that's a realtrailing indicator. So that
talks about what happened fromthe losses in 2020 24 that are
finally catching up and they'repaying, okay, two questions, the
(10:23):
big la fires. That's what we'retalking about. And that was
January. January. Yeah, January.
Okay, big la fires. DoFloridians care about that? Do
people in Boston care aboutthat? Is insurance a national
thing, and so it's
Kevin Davis (10:42):
gonna Okay, all right, just like, just, just
like the earthquake they had,you know, in January, also,
right? That earthquake impactsinsurance. In other words,
insurers, they look and say,Okay, we have X number of
dollars here. Okay, and if weuse it all up in California for
the fire, then guess what? Ican't use it up in Florida for a
(11:03):
hurricane. Well, I can't use itup in other areas. You know,
there's only so much lostdollars you have and and you
have some, I don't want to gettoo deep, but you have
reinsurers. Okay, sure. Yeah,exactly. So instead of, if I own
my insurance company, I don'twant to take every dollar I get
in. I want to get somebody elseto take participate in my loss.
(11:26):
Now, they have certain capacitytoo. They may say, Guess what?
I'm worried about the disasters,the fires, the floods, the
earth, earthquakes, all thosethings. So I'm not, instead of
giving you this much money, I'mgonna give you this much money.
So now is this, it's just amatter of capacity. Everything
has to do with capacity. Howmuch money and insurers are
going to say, I'm going to useon disasters, on fires, and so
(11:50):
what they may want to do is say,I don't want to write fire like,
for example, earthquake, okay,in California, you know,
insurance that we don't want todo earthquake at all. Okay? So
you have to go to the EarthquakeAuthority and get on earthquake,
you know, either we second sellit, because they're saying, this
too expensive, we can't makemoney out of it. But here's the
part about insurance. Part of itis that the thing that gonna
(12:12):
change in insurance, if theclaims are going down, it
doesn't matter as much. Okay? Sojust think about if I'm getting
10% less losses I had before,okay, versus every year they go
up to every year they go up andnow I have money in the bank.
Because insurance really isabout having enough money in a
bank to pay when that disasterhappens, because we can't
(12:34):
predict it, but we know whenthat disaster happen, we need
enough money in the bank. Soright now, an insurance company
has enough money in the bank todeal with today's issues. They
know that. They understand thatright now, the two most
important issues is aunprecedented disaster like what
happened in LA and tariffs isthe two key things that can
(12:56):
change things. It's possiblethat they made our impact as
much as we thought they would,and trends are going down. So if
I'm an insurer right now, I'msaying now it's time to get back
in that marketplace. Because ifthere's a claim six months from
now, nine months from now, andit cost me a lot more to get
refrigerators and things likethat, I can bake I can bring
(13:20):
that cost and to make sure itit's be okay. You know, they're
looking at the cost now and butright now, there's money there.
And so the competitors aresaying, I want a piece of that
action. You know, I'm lookingand keeping the eye open for the
tariff. And what happens? Westart paying a lot of money on
(13:41):
those losses, but in themeantime, I'm ready come back in
the marketplace. Okay,
Robert Nordlund (13:47):
so you're saying that this first quarter
compared to 2024, yeah, youhave, if you had 10 claims last
year, you have nine claims thisyear,
Kevin Davis (13:59):
yeah, or eight or less. Yeah, it's enough. Where
I'm seeing it for the firsttime. Because normally it's
either, you know, it's alwaysmore and it's always more
because we write more business,you know, we expect more. So
last year we wrote 10 accounts,and this year we wrote 12
accounts, you know, we may getone or two. So we historically
(14:20):
get more claims, we write morebusiness, okay, well, for the
first time, we're still writingmore business, but we saw less
claims.
Robert Nordlund (14:27):
Yeah, and if you're getting less claims, you
it isn't as painful if one ofthose claims is a little bit
more expensive, exactly becauseof the tariff, right? Yeah,
yeah. The tariff because ofinflation, because of whatever.
Another twist to that in LosAngeles, for everyone listening,
Kevin and I are in the LosAngeles area. That's 1000s of
(14:49):
homes, and that's going to be amulti year rebuild. Does that
help that it is going to bethose costs are going to be.
Spread over 2345, years. Doesthat help things? It
Kevin Davis (15:04):
helps a lot, because the hurt that the fires
we had four or five years ago,we're still working on them.
We're still figuring out howmuch to pay. What the accident
losses are. Are they gonnarebuild or not? I mean, a lot of
these homes won't never berebuilt, so the true loss will
take a couple of years, but weshould have some estimates, and
(15:24):
without those estimates, meansthat everybody would panic
first, because we saw economiclosses that big, right? Was
horrible? Yes, hard at the news,and it looked like a war zone.
It was just it was horrible,yeah, but when you start sifting
things out, and you start seeingwhat the city is responsible
for, the state responsible for.
The feds are responsible forthings that just not insurable.
(15:46):
You go, what I mean, we knowwhat is insurable. But when do
you start paying for rebuildingthe house and buying new again,
furniture and wood that may nothappen for a couple of years?
Right? So right now, theinsurers are pocketing that
money until they find out howmuch money they actually are
going to
Robert Nordlund (16:06):
owe. Okay, because what's the tariff from
Canada? 30 ish percent. Solumber is going to be 30% more
today, but it may not be 30%more in two years when they're
finally rebuilding that houseExactly. Interesting,
interesting. So we have tochange. We have to have our
brains slide on a time scale nowagain, if that wood is in two
(16:32):
years, it's going to be inflatedby some percentage points also.
So yeah, geez, waste Kevin,
Kevin Davis (16:39):
but assurance recognizes that insurance, when
they some call an inflationguard, you know, got it where it
just because your house is worthX number of dollars, they assume
that if you have a loss, isgoing to be cost more because of
inflation. Isn't there? Theytake into consideration
inflation, not as high as it hasbeen. But guess what they take
(16:59):
into consideration? I mean, it'sthat they know what they again.
I said job to predict.
Robert Nordlund (17:08):
They've been doing it for hundreds of years.
Yeah, they've seen this. That'snot news for them. Okay? Well,
this is absolutely fascinating.
I love having good news to talkabout and to get my brain
spinning. But at this point intime I look at the clock, we
should take a quick break tohear from one of our generous
sponsors, after which we'll beback with more common sense for
common areas on the topic ofgood news and insurance. Hi,
Kevin Davis (17:32):
I'm Kevin Davis, the president of Kevin Davis
Insurance Services. Ourexperienced team of underwriters
will help you when you get thatdeclination, we provide the
voice of reason, someone whowill stand by you. Our
underwriters bring years ofknowledge to our clients that
can't be automated by technologyor driven by price. As a proud
and wins company. We bring truevalue to your community
(17:55):
association clients. We are yourcommunity association insurance
experts,
Robert Nordlund (18:00):
and we're back.
Okay, so Kevin, we talked aboutclaims being down, the actual
cost being spread out over theyears, but I want to come back
to that question, why are claimsdown? Any ideas on that?
Kevin Davis (18:14):
And this is the interesting thing for for me,
because what we're seeing, whatI believe it is, is we have
educated inform board memberswho understand their roles and
responsibility when it comes tomaintaining their association.
And
Robert Nordlund (18:31):
we have, hopefully a few 1000 that have
listened to you say that here onthe podcast,
Kevin Davis (18:36):
exactly excellent, because if you think about it,
claims going down for the firsttime again. Policy count goes
up, claims going down. So I haveto believe that the people who
are out there again, if I come,if I'm saying, guess what, guys,
here's your insurance premium.
And the reason why it's higherbecause your maintenance
(18:57):
agreement, you don't have areserve study. You'd have
reserves of off. That wassudden. You get the point. You
start hearing because now you'repaying more money for your
insurance. Simple as that, yeah,
Robert Nordlund (19:11):
when I'm when I'm thinking about it, I can see
myself walking around aproperty, and this property says
that, you know, our insurancewent up from 50,000 per year to
$100,000 per year, and thatmoney is now spent and gone. And
I want to say, Hey, folks, ifyou would have spent 10,000 or
$20,000 to maintain or fix up afew things here and there, your
(19:34):
insurance premium wouldn't havedoubled, and you'd have that
invested in your own realestate. And that money is not
spent and gone. Is that whatwe're talking about?
Kevin Davis (19:43):
Yes, is that we're talking about. So it has to be
couple things we're looking atas insurance people. We look at
something called RiskManagement, the likelihood of a
claim. Okay? We walk inassociation. We look at
everything, and look at thetrees. We look at the roofs. We
look at the site, you know, therailings, we've got, all those
things that determine what's thelikelihood of a loss. You know,
(20:07):
what kind of equipment you havethere, if there is a water leak,
are you notified of it? And sowhat insurance people have done
and say, you know, if you do a band c, you probably have lower
rate or no, if you have to do A,B, C, you probably can be
insured. Okay, forget lower rateright now. We're not in a lower
rate environment. In order foryou to be insured, there's
(20:30):
certain things you want to haveto do. And I think what's
happening is they learn thatthey have to do certain things.
The main thing they have to dois maintain the association.
Because historically, if yourroof is leaking, you submit the
claim to your insurance carrierand say, My roof's leaking. Now
you know that if your roof isleaking because of a covered
(20:51):
loss, you submit it so certainthings they have learned and
they have experience. So thetimes have changed, because you
have board members now, becausepaying so much insurance
premium, they're getting anunderstanding that, wait a
minute, if I just took bettercare of my association, I will
(21:11):
be able to get an affordablepolicy. Right? Yes, that's the
message.
Robert Nordlund (21:18):
Well, there's two sides of that. If I just
took better care of the place. Icould afford the policy and I
wouldn't get what do you say? Unrenewed?
Kevin Davis (21:26):
Yeah, yes. Non renewed.
Robert Nordlund (21:28):
Not renewed, yeah, and the property looks
better, yes. And you do thepreventive maintenance that
prevents what we call deferredmaintenance, which is more
expensive because of scopecreep. Things get projects get
bigger. And also, if you do alittle preventive maintenance on
your roof, that roof, instead oflasting, I want to say just 20
(21:51):
years is going to last 22 or 23or 24 years, and that $100,000
roof project, you get a few moreyears life out of it. You're
replacing $100,000 roof every 24years, instead of every 20 years
or every 15 years. That's moneysavings all around so, boy, I
(22:12):
see how the math works on thatnow.
Kevin Davis (22:14):
But even more so, it's like you think about it.
You're thinking about, Okay, ifyou do A, B and C, a roof last
longer, and the value goes up,but now nobody's tripping and
falling, nothing sliding off theroof, and nobody's getting hurt.
You know, that's the key thing awell maintained building, the
likelihood of somebody trippingbecause you didn't trim the
trees, you didn't put them pastbecause, because the signs there
(22:36):
that says stop, but you couldn'tsee it because there's grass or
something overgrown, yeah, Bushis everything. Those are the
simple things that you do tolimit those slip and fall
losses,
Robert Nordlund (22:47):
right? And that's the same as the carpeting
in the hallway. Replace itinstead of going from fair to
threadbare and poor, you replaceit when it's getting worn, and
so you don't have someone tripand fall and break a hip and
have that claim in the hallway,so just not letting your
property get Shaggy, trimmingyour trees, like you say, so you
(23:08):
don't have branches falling oncars and people.
Kevin Davis (23:12):
I'm starting to see it to me. That's when I said,
You know what? This isinteresting, because the claims
are going down. Why are theclaims going down? They have to
got the message. The board ofdirectors or community
associations have gotten themessage, and the message is, you
are a well maintainedAssociation. You can be insured,
(23:33):
okay? And once they understandthat, they understand that we
Okay, the insurer are sayingyou're gonna participate in some
of the losses. If you have awater damage loss, guess what?
You have a separate deductiblefor that water damage. So now
all of a sudden, that waterdamage loss is more important to
you today than it was five yearsago, where we covered it no
(23:54):
matter what. So now all of asudden, the Board of Directors
saying what we need to do is tohave something there that be so
we can be notified of that waterthat's leaking, right? Or we got
to have something that says you,you don't own are going to be
responsible if that water leaks,limiting
Robert Nordlund (24:09):
the insurer's expenses. And they have devices
like that, that in the catchpan, in the cash pan, under a
water heater, something thatsenses it's leaking, and you can
catch it quickly and solveproblems quickly. Boy, that
applies to everything we've beentalking about. Catch the
deterioration on the roof andfix it before it gets bad and
causes that expensive interiorunit damage. Catch the carpeting
(24:35):
so that someone doesn't trip,and then you have a real
problem, and I'm thinkingthere's some things that
probably aren't going to help,like that ugly furniture in the
lobby that you've kept for 20years. I'm not sure if that has
a direct insurance relationship,then it just may be low curb
appeal when prospective buyerswalk in the lobby.
Kevin Davis (24:57):
But you know what it is? Is this, if you. Place
it, you have a mindset that weneed to replace. You know,
that's what it is. It's just amindset. Once you say no to one
thing, it says no dumb things.
It's like what happened in NewYork with Giuliani with a broken
window thing, right? Right,right? If you have a broken
window, that means it attracts anuisance, attract those kind of
people. You know, if you have aenvironment where you do
(25:19):
maintain it, you attract peoplewho want to live in that area a
keep things maintained, right,you know.
Robert Nordlund (25:27):
And if you have a standard, yeah, people elevate
the standard cool, yes. Okay,well, we've been talking in the
past about, I'm realizing I'mdoing a lot with my hands here,
lowering the temperature, youknow, increasing civility and
decreasing the anxiety. And nowwe're talking about raising the
(25:48):
standard of what I expect frommy property. We as a community,
we want this to be a nice place.
We want things to be wellmaintained. And what we're
talking about today is thatthat's very cost effective,
Kevin Davis (26:00):
exactly, exactly, but we're forcing the insurance
company is forcing board membersof community association to say,
we need to have a wellmaintained building to get
better insurance. But thereality is, we having a better
maintained association willattract better people to live
there.
Robert Nordlund (26:16):
Yeah, and it's all basically, what we're
talking about is justfundamentally fiscally
responsible behavior. Is thatsomething I've heard of as
called your loss history, where,when the claims are down, is
that loss history?
Kevin Davis (26:31):
Yeah, wait, your loss history is your your claims
you've had over a certain periodof years? Some some are three
years. Some are five years. Theylook at your loss history and
say, Okay, you have water damageclaims. Okay? Or you ask, slip
and falls, whatever it is, theylook at it and what have you
done to fix it? What have youdone to stop it? And we look at
those things to find what it isyou've done. Sometimes you've
done nothing. Well, you've donenothing. Guess what? Your
(26:52):
insurance rates continue to gohigher and higher and higher,
but if you have done something,you are able to be renewed.
Okay? Your rate may go up, butyou still, they still want to
keep you as a client, havingpreferred clients not renewed,
you're not renewed. If you lookat your loss history, if it gets
to a point you don't care aboutyour loss history, we care more
about than you do. Hey, we wantto pass on you guys. Oh,
Robert Nordlund (27:15):
yeah, there's different buckets here. There's
property and casualty, there'sDNO, there's cyber. Is this
across the board, or do you seethis more in one category or
another? It
Kevin Davis (27:27):
all goes together on a condo. And the reason why
is this, you have a propertyloss, okay, the roof caved in,
or you have any kind of regularproperty loss, whatever fire,
whatever it is, okay? That's onething, but if maintain it, it
minimizes your liability losses.
Okay? If you have a wellmaintained Association, then are
you sued as a board memberbecause you did something wrong,
(27:51):
you failed to enforce the rules,or you failed to maintain
because you didn't maintain aproperty correctly? Down a
special assessment? Well, if youmaintain the property. You don't
have a special assessment,therefore you don't have a DNO
claim. So it all goes together.
You eliminate your DNO claims,you eliminate your GL claims.
You're eliminating your cyberclaim. For one reason is that
(28:13):
you have cyber claims becauseyou took your eye off the ball.
If you are a well maintainedAssociation, you will know you
have a maintenance you have amaintenance agreement that you
have to look at. You have, youhave other things you look at.
You have, you just become moreaware of everything. Yeah,
Robert Nordlund (28:30):
you're talking about elevating the standard of
behavior at your associationexactly, no longer just letting
things slide and being ababysitter of the association.
You are curating it, you'renurturing it. And I hope if a
homeowner says, hey, the poolgate isn't closing, then you as
the board, you fix it, ratherthan just let it slide.
Kevin Davis (28:50):
Because every time you look at that gate being
closed, an insurer may send adrone over and say, Wait a
minute, that gate is wide open.
Not only news is gone or yourrate just went up 20 30% that's
the key thing. Yes, if that gateis not because you have to have
self locking gate stuff closinggates, if you don't have that in
there, you're not gonna getinsurance.
Robert Nordlund (29:09):
And so that's it's that. And I'm thinking
about the front entry gate, ifthat's stuck open, that's just
an invitation, or it's actuallylike a sign that says, hey,
yeah, we don't care about ourplace. We don't can come on in
and steal or uninvited gueststhat kind of stuff. Or I don't
kind of want to end on that, butthis has actually been a
fascinating conversation. Kevin,as always, it's great talking
(29:31):
with you. A lot of good newsthat you shared, and I love
hearing that board members aretaking hold of their property
and proactively doing goodthings that are resulting in at
least controlling the premiumsthat have been rising last few
years. And any closing thoughtsto add at this time,
Kevin Davis (29:51):
awareness, just keep being aware of your
associations, maintenanceschedule. Maintain it, because
what's going to happen, rateswill start to drop. Because
capacity will come in. And ifyou have a well maintained
Association, you will get thatpreferred rate first right off
the bat. So we want to make surethat everybody who's listening
to this podcast is able to get abetter insurance rate right off
(30:12):
the bat. And by doing it, bymaintaining Association, you'll
be there. So that's good,
Robert Nordlund (30:18):
fantastic.
Well, from your lips to God'sears, yeah. Okay. Well, we hope
you learned some HOA insightsfrom our discussion today that
helps you bring common sense toyour common areas. Thank you for
joining us today. We lookforward to bringing many more
episodes to you, week after weekafter week. We're going to be
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Think they're gonna change in insurance. If the
(00:02):
claims are going down, itdoesn't matter as much, okay, if
I'm getting 10% less losses Ihad before, okay, okay. Versus
every year they go up, so everyyear they go up, and now I have
money in the bank, becauseinsurance really is about having
enough money in a bank to paywhen that disaster happens.
Because we can't predict it, butwe know when that has to happen.
(00:23):
We need enough money in thebank. So right now, an insurance
company has enough money in thebank to deal with today's
issues. They know that. Theyunderstand that
Announcer (00:31):
HOA Insights is brought to you by five companies
that car (00:34):
Association Insights & Marketplace, Association
Reserves, Community Financials,HOA Invest and Kevin Davis
Insurance Services. You'll findlinks to their websites and
social media in the show notes.
Robert Nordlund (00:47):
Hi, I'm Robert Nordlund from Association
reserves,
Kevin Davis (00:49):
and I'm Kevin Davis of Kevin Davis Insurance
Services. And this is the HOAInsights, where we promote
common sense
Robert Nordlund (00:56):
for common areas. Well, welcome to episode
111 where we're again speakingwith insurance expert and
regular co host, Kevin Davis, sohe can share some good news with
you. Want to make sure you haveall the right information at the
right time to make the rightdecisions for the future of your
association. This helps you ourpodcast audience, to be well
(01:17):
informed and to be well preparedfor the challenging work you do
leading your association. Lastweek's episode number 110
featured a great interview withRussell Muns of community
financials. He's a regular guestexpert on our show and one of
our podcast sponsors, and he wasspeaking about what to look for
in your monthly financialreports. So the numbers have
(01:39):
meaning now if you get yourmonthly financial reports and
they just look like numbers on apage and you have no idea what
they're saying or if they'reright or wrong, or what you
should do about them, make sureyou catch episode 110 now, if
you missed that episode or anyother prior episode, take a
moment after today's program Tolisten from our podcast website,
(02:00):
Hoa insights.org or watch ourYouTube channel, but better yet,
subscribe from any of the majorpodcast platforms, sure you
don't miss any future episodes.
Well, those of you watching onYouTube can see the HOA insights
mug that I have featuring acartoon that puts a smile on my
face. You can get mugs andthings like that from our merch
(02:21):
store, which you can browsethrough from our Hoa
insights.org website, or thelink in our show notes, you'll
find we have some great freestuff there, like board member
zoom backgrounds and somespecialty items for sale, like
the mug that I just showed. Sogo to our merch store, download
a free zoom background, thentake a moment, look around, find
(02:42):
the mug you'd like, and ifyou're the 10th person to email
me at podcast at reserves, a.commentioning episode number 100
and 11th mug giveaway, we'llship that mug to you free of
charge. We enjoy hearing fromyou responding to the issues
you're facing at yourassociation. So if you have a
hot topic, a crazy story, or aquestion you'd like us to
(03:05):
address, you can always contactus at 805-203-3130, or email us
at podcast at reserve study.comnow today's episode comes from a
question submitted by Tracy fromNaples, Florida, who said, what
can you tell us about insurancerates? When is the bad news
going to stop? So Kevin, bracingfor that question, what's this
(03:29):
good news that you want to sharetoday? Well,
Kevin Davis (03:33):
you know, it's fascinating. The first quarter
is over, and this is, this isMay, and we're looking and it's
very quiet out there. It's beenquiet. We had that major fire,
and we had a couple otherdisasters too that happened. We
had an earth major earthquakethat happened in Miramar, you
know. So we had a lot of thingsgoing on, but it's been quiet.
(03:53):
And when it's quiet, that meansis that this uncertainty, okay,
but it doesn't necessarily meanit's bad, because it was bad. We
were here in the news right nowthat insurance company paid X
number of dollars for the fire.
It made X number of but wehaven't heard anything from the
fires. We noticed 270, $5million economic losses from the
fire, biggest loss ever. But howmuch of that is insured? And
(04:18):
that's what we don't we haven'theard yet, and we don't know to
answer that yet. So it's May,and it's quiet out there. So
what I did was this, I startedlooking at all the claims that
we have, and we have about30,000 Community Association in
our office. Okay, so and wewrite all over the country, and
so we start looking, and startnoticing, in that first quarter,
we're seeing less claims thatwe've seen in the past. So this
(04:40):
time last year, our claim countis down. So when the claim
counts go down, and then all ofa sudden we recognize the fact
that over the past couple ofyears, the rates have gone up.
So you can't get better thanthat. I mean, rates are going
up, claims are down. You. Guesswhat happens is that that's the
profit for the insurancecompany. Yeah, that's profit
(05:03):
with insurance companies theright. What happens? Yeah, and
what happens when insurancecompanies have profit? Yeah,
what happens with insurance canhave profit is capacity comes
in. That means new people wantto come back in and guess what?
They want to write business. Idoubt what I'm doing right now
is just purely speculation. Thisis based on my years of
experience, and look reading thetea leaves and everything like
(05:25):
that. So most people willdisagree with me, but based on
just those two things, look, theclaims counts going down and
premium going up. We know thatcompanies are making money right
now. However, now this is themost important part of it. We
don't know about the firstquarter losses yet. We know we
(05:45):
haven't heard anything.
Normally, we hear things. Andthe second thing more important
is the tariffs. The tariffs willcreate major problems for
insurers, okay? And the mainreason why is because you got to
rebuild. You gotta get plumbing.
You gotta get wood from Canada.
(06:07):
You gotta get all therefrigerators and washers and
dryers and cars from China. Soyou're talking about a major
problem there for insurers thatcould cause a problem.
Robert Nordlund (06:19):
It's early, and you got me thinking about a
couple things. Number one,you're reminding me about, I
think it was high schooleconomics. High school was
great. You learned about themajor things, like what gravity
is, just the reality of thisworld that we live in, and the
economic reality of supply anddemand. And when you have profit
(06:39):
the insurance companies, there'sgoing to be more people who want
in on that, and so they're goingto come in and increase the
supply, because there's a thattightening of the demand when
there's not very many insurersthere. So they're going to
rebalance that. And when there'smore competition, because
there's more insurers, that'sgoing to bring the profits down.
(07:02):
And let's not talk about thecompanies now, but talk about
the premiums down. That's That'swhat that's good thing.
Kevin Davis (07:10):
And one thing is important. That's why the
tariffs are so important rightnow. If the tariffs go away,
then all of a sudden, now youwill see a big change, probably
by the third quarter,everybody's sitting tight.
Capacity is coming in, but thetariffs, the key, the tariff, if
they go away, then all of asudden, now you will see the
(07:32):
insurers coming in. Becauseright now, everybody's on hold,
because we don't know, but I amseeing things that says they're
ready to say, Okay, we want tobe competitive again. You know,
we want to write business again.
Rates are high enough now wherethe insurers are making money,
okay, as long as the tariffdoesn't kill us, or the fires
(07:54):
and the floods and the earth,all that kind of stuff doesn't
kill us. But even if they do,they're prepared for that. Now,
they're prepared. They they areaware of these disasters.
There's awareness is there. Sothey weren't prepared for the LA
Fire, if la fire is so uniquebecause of the wind and
(08:15):
everything that happened neverhappened before. So they are
scared of that, but they stilldon't know how much money they
are
Robert Nordlund (08:25):
have to pay obligated. Yeah, we hear these
big numbers, and you said 270, 5million, but I hadn't
appreciated that not all of thatis an insurable loss that the
insurers are going to have toshoulder. So it could be the
loss of, I don't know, thehillside, the greens, the
Kevin Davis (08:47):
vegetation the state owned. The city own it,
you know, yeah, it's just notinsuring.
Robert Nordlund (08:52):
Or the businesses that just aren't in
business anymore, they've moved,they've left, and that may not
have been insurable. There's somany things that so the
insurable number may be a lotlower than that, 275,
Kevin Davis (09:05):
or the wear and tear it takes on just getting to
work now, you know, if you can'tgo through those areas, you
know, is it those part ofeconomic loss too? It's just
interesting, yeah. So, yeah,that's that's not non insurable
loss. It's not insurableeconomic loss doesn't make it an
insurable loss. So right now,all the insurers are sitting
there and going, Okay, we lookedat that, what happened in
(09:27):
January and some of thedisasters, or some flooding and
things like that, and it didn'tcost us as much we thought.
Right now it may be more,because there's still things got
it we got to go through and thetariff days that it is, we just
see the claim counts are lower.
And that's the most importantpart of it. Is that for the
first time in about four or fiveyears, that first quarter of
(09:50):
this year is first quarter lastyear, the claim counts have
declined. That is such greatnews.
Robert Nordlund (09:58):
Just fascinating. So last I'm not
sure it was last time we spoke,or a couple times ago we spoke,
you were talking about how theinsurers were looking at their
loss history and loss history.
That sounds like that's a realtrailing indicator. So that
talks about what happened fromthe losses in 2020 24 that are
finally catching up and they'repaying, okay, two questions, the
(10:23):
big la fires. That's what we'retalking about. And that was
January. January. Yeah, January.
Okay, big la fires. DoFloridians care about that? Do
people in Boston care aboutthat? Is insurance a national
thing, and so it's
Kevin Davis (10:42):
gonna Okay, all right, just like, just, just
like the earthquake they had,you know, in January, also,
right? That earthquake impactsinsurance. In other words,
insurers, they look and say,Okay, we have X number of
dollars here. Okay, and if weuse it all up in California for
the fire, then guess what? Ican't use it up in Florida for a
(11:03):
hurricane. Well, I can't use itup in other areas. You know,
there's only so much lostdollars you have and and you
have some, I don't want to gettoo deep, but you have
reinsurers. Okay, sure. Yeah,exactly. So instead of, if I own
my insurance company, I don'twant to take every dollar I get
in. I want to get somebody elseto take participate in my loss.
(11:26):
Now, they have certain capacitytoo. They may say, Guess what?
I'm worried about the disasters,the fires, the floods, the
earth, earthquakes, all thosethings. So I'm not, instead of
giving you this much money, I'mgonna give you this much money.
So now is this, it's just amatter of capacity. Everything
has to do with capacity. Howmuch money and insurers are
going to say, I'm going to useon disasters, on fires, and so
(11:50):
what they may want to do is say,I don't want to write fire like,
for example, earthquake, okay,in California, you know,
insurance that we don't want todo earthquake at all. Okay? So
you have to go to the EarthquakeAuthority and get on earthquake,
you know, either we second sellit, because they're saying, this
too expensive, we can't makemoney out of it. But here's the
part about insurance. Part of itis that the thing that gonna
(12:12):
change in insurance, if theclaims are going down, it
doesn't matter as much. Okay? Sojust think about if I'm getting
10% less losses I had before,okay, versus every year they go
up to every year they go up andnow I have money in the bank.
Because insurance really isabout having enough money in a
bank to pay when that disasterhappens, because we can't
(12:34):
predict it, but we know whenthat disaster happen, we need
enough money in the bank. Soright now, an insurance company
has enough money in the bank todeal with today's issues. They
know that. They understand thatright now, the two most
important issues is aunprecedented disaster like what
happened in LA and tariffs isthe two key things that can
(12:56):
change things. It's possiblethat they made our impact as
much as we thought they would,and trends are going down. So if
I'm an insurer right now, I'msaying now it's time to get back
in that marketplace. Because ifthere's a claim six months from
now, nine months from now, andit cost me a lot more to get
refrigerators and things likethat, I can bake I can bring
(13:20):
that cost and to make sure itit's be okay. You know, they're
looking at the cost now and butright now, there's money there.
And so the competitors aresaying, I want a piece of that
action. You know, I'm lookingand keeping the eye open for the
tariff. And what happens? Westart paying a lot of money on
(13:41):
those losses, but in themeantime, I'm ready come back in
the marketplace. Okay,
Robert Nordlund (13:47):
so you're saying that this first quarter
compared to 2024, yeah, youhave, if you had 10 claims last
year, you have nine claims thisyear,
Kevin Davis (13:59):
yeah, or eight or less. Yeah, it's enough. Where
I'm seeing it for the firsttime. Because normally it's
either, you know, it's alwaysmore and it's always more
because we write more business,you know, we expect more. So
last year we wrote 10 accounts,and this year we wrote 12
accounts, you know, we may getone or two. So we historically
(14:20):
get more claims, we write morebusiness, okay, well, for the
first time, we're still writingmore business, but we saw less
claims.
Robert Nordlund (14:27):
Yeah, and if you're getting less claims, you
it isn't as painful if one ofthose claims is a little bit
more expensive, exactly becauseof the tariff, right? Yeah,
yeah. The tariff because ofinflation, because of whatever.
Another twist to that in LosAngeles, for everyone listening,
Kevin and I are in the LosAngeles area. That's 1000s of
(14:49):
homes, and that's going to be amulti year rebuild. Does that
help that it is going to bethose costs are going to be.
Spread over 2345, years. Doesthat help things? It
Kevin Davis (15:04):
helps a lot, because the hurt that the fires
we had four or five years ago,we're still working on them.
We're still figuring out howmuch to pay. What the accident
losses are. Are they gonnarebuild or not? I mean, a lot of
these homes won't never berebuilt, so the true loss will
take a couple of years, but weshould have some estimates, and
(15:24):
without those estimates, meansthat everybody would panic
first, because we saw economiclosses that big, right? Was
horrible? Yes, hard at the news,and it looked like a war zone.
It was just it was horrible,yeah, but when you start sifting
things out, and you start seeingwhat the city is responsible
for, the state responsible for.
The feds are responsible forthings that just not insurable.
(15:46):
You go, what I mean, we knowwhat is insurable. But when do
you start paying for rebuildingthe house and buying new again,
furniture and wood that may nothappen for a couple of years?
Right? So right now, theinsurers are pocketing that
money until they find out howmuch money they actually are
going to
Robert Nordlund (16:06):
owe. Okay, because what's the tariff from
Canada? 30 ish percent. Solumber is going to be 30% more
today, but it may not be 30%more in two years when they're
finally rebuilding that houseExactly. Interesting,
interesting. So we have tochange. We have to have our
brains slide on a time scale nowagain, if that wood is in two
(16:32):
years, it's going to be inflatedby some percentage points also.
So yeah, geez, waste Kevin,
Kevin Davis (16:39):
but assurance recognizes that insurance, when
they some call an inflationguard, you know, got it where it
just because your house is worthX number of dollars, they assume
that if you have a loss, isgoing to be cost more because of
inflation. Isn't there? Theytake into consideration
inflation, not as high as it hasbeen. But guess what they take
(16:59):
into consideration? I mean, it'sthat they know what they again.
I said job to predict.
Robert Nordlund (17:08):
They've been doing it for hundreds of years.
Yeah, they've seen this. That'snot news for them. Okay? Well,
this is absolutely fascinating.
I love having good news to talkabout and to get my brain
spinning. But at this point intime I look at the clock, we
should take a quick break tohear from one of our generous
sponsors, after which we'll beback with more common sense for
common areas on the topic ofgood news and insurance. Hi,
Kevin Davis (17:32):
I'm Kevin Davis, the president of Kevin Davis
Insurance Services. Ourexperienced team of underwriters
will help you when you get thatdeclination, we provide the
voice of reason, someone whowill stand by you. Our
underwriters bring years ofknowledge to our clients that
can't be automated by technologyor driven by price. As a proud
and wins company. We bring truevalue to your community
(17:55):
association clients. We are yourcommunity association insurance
experts,
Robert Nordlund (18:00):
and we're back.
Okay, so Kevin, we talked aboutclaims being down, the actual
cost being spread out over theyears, but I want to come back
to that question, why are claimsdown? Any ideas on that?
Kevin Davis (18:14):
And this is the interesting thing for for me,
because what we're seeing, whatI believe it is, is we have
educated inform board memberswho understand their roles and
responsibility when it comes tomaintaining their association.
And
Robert Nordlund (18:31):
we have, hopefully a few 1000 that have
listened to you say that here onthe podcast,
Kevin Davis (18:36):
exactly excellent, because if you think about it,
claims going down for the firsttime again. Policy count goes
up, claims going down. So I haveto believe that the people who
are out there again, if I come,if I'm saying, guess what, guys,
here's your insurance premium.
And the reason why it's higherbecause your maintenance
(18:57):
agreement, you don't have areserve study. You'd have
reserves of off. That wassudden. You get the point. You
start hearing because now you'repaying more money for your
insurance. Simple as that, yeah,
Robert Nordlund (19:11):
when I'm when I'm thinking about it, I can see
myself walking around aproperty, and this property says
that, you know, our insurancewent up from 50,000 per year to
$100,000 per year, and thatmoney is now spent and gone. And
I want to say, Hey, folks, ifyou would have spent 10,000 or
$20,000 to maintain or fix up afew things here and there, your
(19:34):
insurance premium wouldn't havedoubled, and you'd have that
invested in your own realestate. And that money is not
spent and gone. Is that whatwe're talking about?
Kevin Davis (19:43):
Yes, is that we're talking about. So it has to be
couple things we're looking atas insurance people. We look at
something called RiskManagement, the likelihood of a
claim. Okay? We walk inassociation. We look at
everything, and look at thetrees. We look at the roofs. We
look at the site, you know, therailings, we've got, all those
things that determine what's thelikelihood of a loss. You know,
(20:07):
what kind of equipment you havethere, if there is a water leak,
are you notified of it? And sowhat insurance people have done
and say, you know, if you do a band c, you probably have lower
rate or no, if you have to do A,B, C, you probably can be
insured. Okay, forget lower rateright now. We're not in a lower
rate environment. In order foryou to be insured, there's
(20:30):
certain things you want to haveto do. And I think what's
happening is they learn thatthey have to do certain things.
The main thing they have to dois maintain the association.
Because historically, if yourroof is leaking, you submit the
claim to your insurance carrierand say, My roof's leaking. Now
you know that if your roof isleaking because of a covered
(20:51):
loss, you submit it so certainthings they have learned and
they have experience. So thetimes have changed, because you
have board members now, becausepaying so much insurance
premium, they're getting anunderstanding that, wait a
minute, if I just took bettercare of my association, I will
(21:11):
be able to get an affordablepolicy. Right? Yes, that's the
message.
Robert Nordlund (21:18):
Well, there's two sides of that. If I just
took better care of the place. Icould afford the policy and I
wouldn't get what do you say? Unrenewed?
Kevin Davis (21:26):
Yeah, yes. Non renewed.
Robert Nordlund (21:28):
Not renewed, yeah, and the property looks
better, yes. And you do thepreventive maintenance that
prevents what we call deferredmaintenance, which is more
expensive because of scopecreep. Things get projects get
bigger. And also, if you do alittle preventive maintenance on
your roof, that roof, instead oflasting, I want to say just 20
(21:51):
years is going to last 22 or 23or 24 years, and that $100,000
roof project, you get a few moreyears life out of it. You're
replacing $100,000 roof every 24years, instead of every 20 years
or every 15 years. That's moneysavings all around so, boy, I
(22:12):
see how the math works on thatnow.
Kevin Davis (22:14):
But even more so, it's like you think about it.
You're thinking about, Okay, ifyou do A, B and C, a roof last
longer, and the value goes up,but now nobody's tripping and
falling, nothing sliding off theroof, and nobody's getting hurt.
You know, that's the key thing awell maintained building, the
likelihood of somebody trippingbecause you didn't trim the
trees, you didn't put them pastbecause, because the signs there
(22:36):
that says stop, but you couldn'tsee it because there's grass or
something overgrown, yeah, Bushis everything. Those are the
simple things that you do tolimit those slip and fall
losses,
Robert Nordlund (22:47):
right? And that's the same as the carpeting
in the hallway. Replace itinstead of going from fair to
threadbare and poor, you replaceit when it's getting worn, and
so you don't have someone tripand fall and break a hip and
have that claim in the hallway,so just not letting your
property get Shaggy, trimmingyour trees, like you say, so you
(23:08):
don't have branches falling oncars and people.
Kevin Davis (23:12):
I'm starting to see it to me. That's when I said,
You know what? This isinteresting, because the claims
are going down. Why are theclaims going down? They have to
got the message. The board ofdirectors or community
associations have gotten themessage, and the message is, you
are a well maintainedAssociation. You can be insured,
(23:33):
okay? And once they understandthat, they understand that we
Okay, the insurer are sayingyou're gonna participate in some
of the losses. If you have awater damage loss, guess what?
You have a separate deductiblefor that water damage. So now
all of a sudden, that waterdamage loss is more important to
you today than it was five yearsago, where we covered it no
(23:54):
matter what. So now all of asudden, the Board of Directors
saying what we need to do is tohave something there that be so
we can be notified of that waterthat's leaking, right? Or we got
to have something that says you,you don't own are going to be
responsible if that water leaks,limiting
Robert Nordlund (24:09):
the insurer's expenses. And they have devices
like that, that in the catchpan, in the cash pan, under a
water heater, something thatsenses it's leaking, and you can
catch it quickly and solveproblems quickly. Boy, that
applies to everything we've beentalking about. Catch the
deterioration on the roof andfix it before it gets bad and
causes that expensive interiorunit damage. Catch the carpeting
(24:35):
so that someone doesn't trip,and then you have a real
problem, and I'm thinkingthere's some things that
probably aren't going to help,like that ugly furniture in the
lobby that you've kept for 20years. I'm not sure if that has
a direct insurance relationship,then it just may be low curb
appeal when prospective buyerswalk in the lobby.
Kevin Davis (24:57):
But you know what it is? Is this, if you. Place
it, you have a mindset that weneed to replace. You know,
that's what it is. It's just amindset. Once you say no to one
thing, it says no dumb things.
It's like what happened in NewYork with Giuliani with a broken
window thing, right? Right,right? If you have a broken
window, that means it attracts anuisance, attract those kind of
people. You know, if you have aenvironment where you do
(25:19):
maintain it, you attract peoplewho want to live in that area a
keep things maintained, right,you know.
Robert Nordlund (25:27):
And if you have a standard, yeah, people elevate
the standard cool, yes. Okay,well, we've been talking in the
past about, I'm realizing I'mdoing a lot with my hands here,
lowering the temperature, youknow, increasing civility and
decreasing the anxiety. And nowwe're talking about raising the
(25:48):
standard of what I expect frommy property. We as a community,
we want this to be a nice place.
We want things to be wellmaintained. And what we're
talking about today is thatthat's very cost effective,
Kevin Davis (26:00):
exactly, exactly, but we're forcing the insurance
company is forcing board membersof community association to say,
we need to have a wellmaintained building to get
better insurance. But thereality is, we having a better
maintained association willattract better people to live
there.
Robert Nordlund (26:16):
Yeah, and it's all basically, what we're
talking about is justfundamentally fiscally
responsible behavior. Is thatsomething I've heard of as
called your loss history, where,when the claims are down, is
that loss history?
Kevin Davis (26:31):
Yeah, wait, your loss history is your your claims
you've had over a certain periodof years? Some some are three
years. Some are five years. Theylook at your loss history and
say, Okay, you have water damageclaims. Okay? Or you ask, slip
and falls, whatever it is, theylook at it and what have you
done to fix it? What have youdone to stop it? And we look at
those things to find what it isyou've done. Sometimes you've
done nothing. Well, you've donenothing. Guess what? Your
(26:52):
insurance rates continue to gohigher and higher and higher,
but if you have done something,you are able to be renewed.
Okay? Your rate may go up, butyou still, they still want to
keep you as a client, havingpreferred clients not renewed,
you're not renewed. If you lookat your loss history, if it gets
to a point you don't care aboutyour loss history, we care more
about than you do. Hey, we wantto pass on you guys. Oh,
Robert Nordlund (27:15):
yeah, there's different buckets here. There's
property and casualty, there'sDNO, there's cyber. Is this
across the board, or do you seethis more in one category or
another? It
Kevin Davis (27:27):
all goes together on a condo. And the reason why
is this, you have a propertyloss, okay, the roof caved in,
or you have any kind of regularproperty loss, whatever fire,
whatever it is, okay? That's onething, but if maintain it, it
minimizes your liability losses.
Okay? If you have a wellmaintained Association, then are
you sued as a board memberbecause you did something wrong,
(27:51):
you failed to enforce the rules,or you failed to maintain
because you didn't maintain aproperty correctly? Down a
special assessment? Well, if youmaintain the property. You don't
have a special assessment,therefore you don't have a DNO
claim. So it all goes together.
You eliminate your DNO claims,you eliminate your GL claims.
You're eliminating your cyberclaim. For one reason is that
(28:13):
you have cyber claims becauseyou took your eye off the ball.
If you are a well maintainedAssociation, you will know you
have a maintenance you have amaintenance agreement that you
have to look at. You have, youhave other things you look at.
You have, you just become moreaware of everything. Yeah,
Robert Nordlund (28:30):
you're talking about elevating the standard of
behavior at your associationexactly, no longer just letting
things slide and being ababysitter of the association.
You are curating it, you'renurturing it. And I hope if a
homeowner says, hey, the poolgate isn't closing, then you as
the board, you fix it, ratherthan just let it slide.
Kevin Davis (28:50):
Because every time you look at that gate being
closed, an insurer may send adrone over and say, Wait a
minute, that gate is wide open.
Not only news is gone or yourrate just went up 20 30% that's
the key thing. Yes, if that gateis not because you have to have
self locking gate stuff closinggates, if you don't have that in
there, you're not gonna getinsurance.
Robert Nordlund (29:09):
And so that's it's that. And I'm thinking
about the front entry gate, ifthat's stuck open, that's just
an invitation, or it's actuallylike a sign that says, hey,
yeah, we don't care about ourplace. We don't can come on in
and steal or uninvited gueststhat kind of stuff. Or I don't
kind of want to end on that, butthis has actually been a
fascinating conversation. Kevin,as always, it's great talking
(29:31):
with you. A lot of good newsthat you shared, and I love
hearing that board members aretaking hold of their property
and proactively doing goodthings that are resulting in at
least controlling the premiumsthat have been rising last few
years. And any closing thoughtsto add at this time,
Kevin Davis (29:51):
awareness, just keep being aware of your
associations, maintenanceschedule. Maintain it, because
what's going to happen, rateswill start to drop. Because
capacity will come in. And ifyou have a well maintained
Association, you will get thatpreferred rate first right off
the bat. So we want to make surethat everybody who's listening
to this podcast is able to get abetter insurance rate right off
(30:12):
the bat. And by doing it, bymaintaining Association, you'll
be there. So that's good,
Robert Nordlund (30:18):
fantastic.
Well, from your lips to God'sears, yeah. Okay. Well, we hope
you learned some HOA insightsfrom our discussion today that
helps you bring common sense toyour common areas. Thank you for
joining us today. We lookforward to bringing many more
episodes to you, week after weekafter week. We're going to be
here. It'll be great to have youjoin us on a regular basis.
Spread the word
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