Why Condominium Projects Mean Expensive Insurance Rates

There are several reasons why Condominium projects lead to increase insurance costs.

The biggest driver for and increase in premium due to condominium work is due to the large amount of claims attributed to condominium work and the sheer number of claims that arise out of condominium projects.

This is not necessarily a case of quantity over quality, as there are issues with both severity of the claim and the amount of claims that occur each year.

Insurance companies have shelled out huge sums due to claims involving construction defects on condominium projects.

Condominium projects are often highly leveraged financially. When that is the case, developers are often more interested in saving dollars than building high quality projects. They may scrimp on materials and forego what they deem “optional” design services, such as construction observation.

Lawyers recognize condominiums as litigation goldmines. They actively solicit homeowner associations as potential clients and often urge these associations to provide a very critical review of the complex in a search to find defects with their buildings and grounds. If the developer scrimped on quality, it probably won’t take long to find a reason to file a demand.

For some more information on this topic, please visit the A/E ProNet website HERE