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Property Insurance Market Update

The shift in the insurance market that started in 2018 continues to impact condominium corporations and multi-family rental properties across Canada.  Unfortunately, the hardening of the insurance market and aggressive changes by insurance companies continued into 2021 with Covid-19 hitting the insurance industry. 

Like many markets, the insurance market is cyclical.  In the recent past, benefits from a softer market were enjoyed by many in the property management industry. However, the long-term results of rising claims and reduced profitability, further impacted by a world-wide pandemic has the property management industry in a hard market.

Hard Market 101 - Lloyd Sadd Insurance Brokers Ltd.

 

The property and the real estate market are leading the lines of the insurance coverage hardest hit[1] by the hard market cycle.  This is due in part from increases in property claims, water damages, natural catastrophes, and fires.

In addition to the increased claims, the other factors impacting property management & real estate insurance market include:

  • Increase in replacement cost valuations on an average of 7-10%
  • Increase in the number of claims and frequency of claims made by condominium corporations and stratas (“claims inflation”)
  • Repair costs have increased on average of 10%[2]
  • Insurance industry recorded an underwriting loss of $244 million for the period and an overall loss of $5.1 million[3]
  • Historic low interest rates
  • Increase in severity for liability losses (“social inflation”).

Equally important, there has been a decrease in the number of insurance companies in Canada that are willing to insure real estate, especially condominium corporations.  In such cases, capacity is restricted resulting in less insurance supply.  For this reason, the increase demands leads to increased premiums.

Reported increases in the media highlighting higher premium rates and shrinking coverage capacities confirms what we are seeing and hearing from our partners and services providers.  Alberta is not unique as this market is being throughout Canada and the United States.

Emerald Management & Realty Ltd. has been actively working on this year’s insurance renewal for properties.  With many of the leaders in the insurance markets indicating hard market our team has been heavily involved in navigating the current insurance market with our team and master insurance partners to mitigate the financial impact from the changes in the marketplace to achieve the best rates for our clients.  

The following is a snapshot of the strategic marketing undertaken by our team to aggressively respond to adverse market conditions.  Our goal is to mitigate the financial repercussions impacting condominium corporations and multi-family rental dwellings across Canada.  

 

How to get ahead in a hard insurance market?

With insurers struggling to meet demand, there has been an increase in information required.  Many insurers are placing requirements such as the: mandating preventative maintenance programs; replacement of roofs; and even, mandating improvements to boiler & mechanical systems and the replacement of hot water tanks & furnaces. 

Insurers want more robust information, and it is important that you are prepared. It is integral that preventative maintenance programs are in effect and inspections are up-to-date.  Properties need to be well maintained and risk assessments completed.  In situations where the insurer requires replacements or improvements, the time taken and information gathering helps in the long run when it comes to renewal conditions.

Our valued partners at Lloyd Sadd Insurance Brokers Ltd. further recommend that to get the best results in a hard market you need to:

  • Start early
  • Provide a robust renewal submission highlighting your maintenance programs and property management standards
  • Focus on claims mitigation
  • Keep property appraisals up to date
  • Build partnerships and promote loyalty[4]

The early intervention taken by Emerald Management & Realty Ltd., including gathering and preparing information to promote the properties and condominium corporations has been presented and marketed to various insurance companies. Early indications and feedback from the insurers indicate that the process has proven to assist with renewals.  

Further to the current insurance environment, Emerald continues to work on behalf of its clients to minimize the impact of this shift on pricing to maintain the benefits of our insurance program.   We continue to be focused on achieving the advantage of our low corporate rates, reasonable deductible levels, prompt claims management, rental revenue loss coverage, vacancy coverages. 

To discuss the Emerald Management & Realty Ltd. master insurance program advantage and any concerns you have with your current property coverage please contact our team today. 

For more information about the hard insurance market visit:

[1] Hub International 2021 Hard Market Information Bulletin

[2] BFL Canada Insurance Services Inc. Market Insight December 2018

[3] Navacord Hard Market Insights

[4] Lloydsadd Hard Market Insight 2021


Why do property managers do inspections?

Importance of Property Management Inspections

 

Property Inspections are a key to property management systems and processes … and again this year, it looks like inspections will be completed very differently than they have in the past!  Inspections: pre, during and post COVID-19, continue to evolve while their importance remains relevant as ever.

Rooftop views captured of downtown Calgary during recent condominium property inspection (May 2021)

Moreover, inspections are done for a variety of different purposes and reasons. For example: checking for damages before and after move-ins or move-outs; inspecting work completed by contractors, making sure your property’s first impression meets the grade; and, helping to plan for preventative or necessary repairs.  Likewise, inspections are done on different schedules (ie) weekly, monthly, semi-annually and annually.  It often depends on the purpose and property needs.

Another important purpose for property management inspections are to ensure that you are meeting your insurance obligations when it comes to vacant properties.  For instance, insurance companies can require vacant inspections at certain frequencies depending on the policy.

Ultimately, the goal of any inspection is to protect the equity in your property for the enjoyment of owners and residents. 

Essentially, the purpose of an inspection is to observe conditions, assess maintenance programs and note opportunities for improvement.  Furthermore, they provide a mechanism for reporting back  to property owners and condominium boards.  This helps facilitate conversations to protect that value of the property.  Further, this integral procedure helps a property manager support the owner or condominium board in making informed decisions.  Having knowledge is key in taking a proactive approach and optimizing the occupants use and enjoyment. 

Depending on your property management agreement, property inspection help a board or owner make informed decisions about maintenance requirements and protect the value of their asset. 

Often a condominium community or apartment building will employ a resident manager or building operator to support this mission of conducting regular site inspections. Other times and depending on your budget along with the engagement of your condominium board, committee or owners, everyone can assist with inspections.  Ultimately, everyone’s support as a team vested in the success of your property and being the “eyes and ears” assists to catch property issues and maintenance concerns so that problems can be addressed before they escalate into bigger issues.

Since every property and condominium corporation is unique, it is important to ask your property management company how they inspect the properties they manage and their recommendations on how they can help support effective solutions to meet your expectations that are in-line your budget requirements.

The following are questions to consider when it comes to inspections:

Why do I need regular inspections?

Regular inspections help avoid bigger problems from taking you by surprise. Regular inspections are great for inspecting common areas and the exterior.  With COVID19 and everyone’s safety top of mind, the inspection of interior spaces is being handled a little more creatively.  The use of ZOOM, FaceTime and Video Conferencing have proven fantastic tools when quarantine concerns and social distancing rules apply.  Being flexible and resourceful is more important than ever – ‘where there is a will, there is a way”.

How often do you inspect the exterior of the property? 

TIP: A drive by inspection can be done frequently.  While it is less formal, this type of inspection may be very acceptable for frequent visits. 

A full-scale exterior inspection is great for seasonal changes or after large infrastructure repairs. Typically, a full building or 100% inspection is done on an annual basis, but some areas or features of your property or condominium corporation may need to be checked on more frequently.

Again, this is something you can schedule quarterly or when session changes – basically at an interval that makes sense for your property.  Do you have a goal around capital expenditures? Are you reviewing potential improvements relating to your reserve fund report? Go through your list, bring along your smart phone and start walking!  Check off items that are in good shape and make detailed notes of anything that needs fixing.  You can always prioritize a plan of action later … and don’t forget to take pictures!  Your property management company will have tools and a process in place to assist with their internal controls and reports when it comes to reviewing needs and arranging for repairs and maintenance.

Who completes the property inspection?

As noted above, the property inspection is integral to the successful management of any property and often a responsibility assigned to the property management company.  Inspections can be completed by the property manager, however; they can also be completed by the broker, team manager, support staff or valued contractors. 

Inspections are valuable tools to assess what needs to be done to keep your property in great condition, maintain value and potentially reduce the need for significant repairs. Sometimes, you may feel that more frequent inspections are required to support your goal with respect to the overall resident experience and asset appreciation. 

A successful inspection requires a property manager to be watchful and observant, looking at property element with scrutiny balanced with the understanding of the owners goals and budget instructions. 

While this may be out of the scope of your property management services, depending on your needs and expectations, you may wish to add-on additional inspections for a set fee or may look at engaging a professional inspection company.

What’s on a property inspection checklist?

This varies from property to property and depends on the type of inspection you are completing.

For example, a bareland condominium corporation or a single family home would have different elements compared to an apartment building or hi-rise condominium.  Larger properties will have more complex mechanical checks supported by preventative maintenance programs and annual certifications. 

Depending on the type of property your property manager is inspecting, the following is a quick sample of what a property manager would look at during a routine inspection:

Windows

  • Check to see if there are any signs of moisture
  • Do opening and closing devices work
  • Are there any visible window seal issues?
  • Are the windows clean
  • Are moisture issues evident on ledges
  • Look for any irregular concerns

Common Hallways

  • Inspect the walls, floors, and ceilings for damage and cleanliness
  • Pay attention to HVAC systems and venting
  • Is emergency signage working
  • Are fire doors closed
  • Inspection dates on fire extinguishers
  • Look out for signs of rodents or bugs
  • Are hallways free of hazards

Exteriors

  • Note the condition of the siding or brick
  • Inspect for litter
  • Review exterior landscaping
  • Inspect exterior doors to ensure they close property and are secure
  • Look at sidewalks for hazards
  • Review signage
  • Examine balconies for bylaw infractions or potential repairs 

Risk management

  • Review factors affecting health such as cleanliness
  • Inspect items that support well-being and safety of residents
  • Survey property operations and resident liaison activities
  • Assessment of risk 
  • Review of security concerns or potential hazards

Again, the type of inspection needed depends on the type of asset and the purpose of the inspection (ie) preventative lifecycle, periodic tenant inspection, building exterior visual assessment to meet city bylaw requirements, etc.,. 

Emerald Management & Realty Ltd. Is a licensed property management brokerage.  Its team of licensed property managers understands the importance of property inspections and the importance of teamwork when it comes to managing real estate assets and condominium corporations.  We pride ourselves on a reputation grounded in integrity, reliability, and value for service. We are excited for the opportunity to help you to define goals, review strategy options and understand your property maintenance needs and can help you:

  • Evaluate performance and progress
  • Identify successes and problems
  • Make long-term decisions, and
  • Develop long term property maintenance plans.

All of this starts with a property inspection and a conversation about your goals! Contact us today to learn how Emerald Management & Realty Ltd. can help your condominium corporation and condo board plan for the future.  In any condominium corporation, this is an essential part of strong management and potentially prevent painful situations like expensive special assessments.  For more information on the wide variety of services Emerald Management & Realty Ltd. offers, please contact our team at 403-237-8600.


Rain Related Leaks

What can you do when the weatherman predicts significant amounts of rainfall and you are experiencing a leak or flooding?

 

Rainy days … … we can appreciate that you would rather be snuggling in with a good book or catching up on your latest Netflix craving, however, sometimes Mother Nature has other ideas.  If you experience a leak or flooding during a rainfall or stormy weather, there are some steps you can take to mitigate damage in your home. 

 

Step 1. 

Try and prevent as much damage as possible. As soon as you notice a a leak coming into your home, try to contain it. Place a bucket and/or a tarp under the leak to help minimize damage. Move valuables and documents out of the way.

TIP … If you notice water coming through a crack in the caulking in your home, around windows or doors, place a towel at the leak to catch the water.

TIP … If you have a sump pump or backflow valve, ensure it is working.

TIP …  If you reside in a single family home, make sure your downspouts are directed away from your home. If you notice a leak in your basement during the rainfall, start by double-checking the positioning of your downspouts. If a downspout is causing water to run towards the home, change the direction away from the home and let your Property Manager know about the situation.

Monitor the water leak and contact our team at Emerald Management & Realty Ltd. at 403-237-8600 to discuss next steps.  Sometimes, a roofer or maintenance person may not be able to assist until after the rain stops because of safety concerns.

If the leak is containable and not an emergency,  complete our on-line maintenance request form to let us know of the non-emergency maintenance issue. Continue to monitor the situation and if it gets worse, keep us informed so that your issue can be handled at the appropriate priority level.

Step 2.

Try to dry out the area as much as possible. Use old towels, mops or other tools you have at your disposal to safely remove the water.  Make sure to safeguard your personal items, electronics, etc., by moving them away from the water (finding another room or alternate location might be best as repairs could also be required and no point in moving them multiple times if you can avoid it).  Unplug electronics and appliances where necessary. 

TIP … Fans can be of great help! Not only do they circulate the air and dry out the area but can also help prevent mold from growing!

Again, if the leak is containable and not an emergency,  complete our on-line maintenance request form to let us know about the issue. Monitor the situation, and if it gets worse, keep us informed so that your issue can be handled at the appropriate priority level.

Step 3.

If the leak gets worse, call us right away at 403-237-8600.  Emerald Management & Realty Ltd. has a team on-call to address after hours emergencies. Let us know what is going on so that we can provide assistance and help trouble shoot the situation. We can experience high call volumes during periods of heavy rainfall; all calls will be handled in priority sequence.

TIP … Call 911 if someone’s life is in danger.

TIP … Have an evacuation plan and 72-hour kit if you need to leave your home. 

TIP … For real-time updates and advisories in situations where heavy rainfall warnings or State of Local Emergencies have been declared, visit the City of Calgary’s Flood Information and sign up for alerts.

Depending on the size of the leak, you may need to call in extra support … especially when a bucket or tarp won’t contain the water.  If a bucket and tarp are not an option, we might need to pump out the water or use alternate measures to handle the water entering your home. 

Emerald Management & Realty Ltd.

As referenced above, sometimes problems that arise from a leaking roof can often only be temporarily repaired until the rain stops in part due to danger to workers and because the area of repair needs to dry out first.

Once these steps have been taken and any danger to yourself and you home has been avoided, as soon as the rain stops, more permanent repairs can be arranged. 

Many leak and flood related repairs can only be done when the rain has stopped and the area dried out.

Depending on the nature and extent of the damage, this may result in an insurance claim.  In these situations, the scheduling of repairs will involve the insurance company and timing of repairs impacted by their schedules. 

Emerald Management & Realty Ltd. has 50 years of property management experience in Calgary, AB & area.  Locally owned and operated, our top choice team has the extensive knowledge and support systems in place to attend to your property management concerns with the goal of protecting your real estate asset and the residents who call the property “home”.

 


Protect your home from water damage

Damage resulting from water is a hot topic with owners and insurance companies. In response to conversations with insurance brokers, owners and tenants about water damage, we have created some property management tips to help you protect yourself and your property.

 

Using Emerald Management & Realty Ltd.’s experience dealing with a variety

Emerald Management & Realty Ltd.

of different issues, we are proud to share our experience. 

 

Summarized as 3 simple tips, find out what you can do to prevent a water leak and how to respond in the event you experience a water loss:

 

TIP #1: Before you move in:

Review the condominium bylaws and your mortgage to make sure you understand what you are required to insure. You can take the bylaws to your insurance broker who understands your account to discuss your insurance needs. The following are some questions to review with your broker:

  • What do I need coverage for?
  • What are my deductibles in the event I have a loss?
  • Could I be responsible for the Corporation’s deductible if the loss is my fault? If so, can I get a deductible rider for such situations?
  • If there is major damage to the property and I have to move-out, how are my living and mortgage expenses covered?
  • What are considered “improvements and betterments” and I am covered?
  • If I am away from my home do, I need someone to check on it? If so, how often?
  • Do I have enough coverage for improvements, contents (i.e. clothes, furniture, electronics, etc.,), special assessments, liabilities, etc.?
  • If I am renting out my home, do I need any different types of coverage (ie) coverage for lost income in the event of an insured loss? 

TIP #2: Now that you’re home, remember:

Keep your emergency contact information handy and know where the water shut off valves are.

In the event of a leak, know who to call and when. Emerald Management & Realty Ltd. can be reached at its 24-hour emergency line: 403-237-8600. For useful emergency contacts visit our recent blog: “What is an Emergency”

Typically, the water shut off valves for your home will be:

  • Apartment: Usually there will be a shut off valve in any room where water is used. Example: under the bathroom sink or next to the toilet tank. In the event you have in floor heating, there should be a few valves in a closet or the laundry room. You can use these valves to turn off the water for your unit.
  • Single family home or townhome: Usually there will be a shut off valve in any room where water is used. Example: under the bathroom sink, next to the toilet tank. The main shut off valve is typically found in the basement or ground floor where the pipes come into the house. Don’t forget to check the garage if it is attached to the house. If you have an internal water meter, the valve will be on the pipe going to the meter.

FYI – Shut off valves for washing machines and dishwashers are typically located behind the machine on the pipes. Carefully turn the tap clockwise to shut off the water supply. Do not force the valve because you don’t want to break it.

TIP #3: Prevent water damage

There are some simple things you can do to avoid unnecessary water leaks.

  • Contract a professional when completing plumbing repairs, replacements or upgrades
  • Never leave running water taps unattended.
  • Don’t leave washers or dishwashers running when you are not home or while you are sleeping
  • Only use a toilet for what it was intended for. To keep your toilet and pipes clog-free, avoid disposing:
    • Baby wipes
    • Paper towels & tissues
    • Personal products: Q-tips, cotton pads, sanitary items, condoms, dental floss
    • Diapers
    • Cigarette butts
    • Kitty litter
    • Hair
    • Gum
    • Cooking grease and food
    • Bleach
  • Test your toilet for leaks periodically throughout the year by dropping some food colouring into the toilet tank. If the colouring appears in the toilet bowl, you have a leak.
  • Never leave a toilet running. Be sure it has stopped filling prior to leaving your home. If the toilet takes a long time to fill, there may be a leak in the tank or the fill valve may be stuck open.
  • If you will be away for an extended period, have a trusted friend or neighbour check in on your home. Often, your insurance policy will have a requirement that you need to have your home inspected regularly when you are away.
  • During cold weather, make sure your heat is set at a minimum of 15 degrees Celsius. Typically, this is a good rule of thumb, but your home may be different. Temperatures should register at 15-21 in cold weather to avoid frozen pipes.
  • During cold weather, never leave a window open. Temperatures can fluctuate quickly and a pipe can freeze in minutes.
  • If you experience a water or power outage, make sure your taps are turned to the “off” position.

Even when all the precautions have been taken, a leak can happen. In the event of a leak, a quick response is essential. This is why it is so important to know where your water shut off valves are and who to contact, especially at 2 am!

Prevention is key but If you experience a leak, the following action can help minimize losses:

  1. Turn off the water
  2. Turn off all electrical appliances in the area
  3. Grab a bucket and place it under the leak to catch the water, if possible
  4. If you live in an apartment style building and experiencing an extensive leak, check with your neighbours to make sure they aren’t flooding.  Vis-versa, if you are experiencing flooding and don’t know where the water is coming from, check with your neighbours to see if they are the source.
  5. Call Emerald Management & Realty Ltd. at 403-237-8600 and report the leak

These maintenance tips are an important step towards mitigating the risk of water damage and keeping any damage that does occur to a minimum.  Dealing with any type of leak and potential insurance claims doesn’t have to be frustrating.  By implementing these types you are arming yourself with the knowledge of what you can do to prevent an emergency situation

With over 40 years of property management experience, Emerald Management & Realty Ltd. is trusted to respond with experience and responsive systems to assist property owners and condominium boards with these types of stressful situations.  We value the opportunity to provide condominium management in Calgary & Area and available to discuss our services.  Contact us to find out more!