Master Policy deductibles seem to be increasing even though our Association filed very few claims. Why?
For many years, Master Policies included property damage deductibles of $1,000. While low deductibles kept costs down for many associations, the small deductible resulted in a large number of small, maintenance-related claims being paid that served as a short-term remedy for a loss rather than addressing the source of the problem (leaking pipes, aging roofs, washing machine hose breaks, water heater failure, condensate line overflows, etc.). Because insurance coverage is designed to protect insureds from larger and/or catastrophic losses and not serve as a maintenance contract, many carriers are implementing higher deductibles as a means of controlling smaller losses and shifting responsibility back to the unit owner for maintenance-related claims in an effort to keep the insurance program viable and premiums lower for a long time to come. Again, practicing sound risk management and maintaining the association’s structures will help to keep costs down, especially when small losses fall
