Last year, I got a call from a manager who managed a 160-unit condominium community that was having trouble finding insurance coverage, and their broker suggested she contact me to see if Farmers would insure them. In addition to having a high number of rentals in the community and an armed security patrol, they also had three fires in two years. Basically, it was every insurance carrier’s nightmare.

As expected, Farmers declined to provide a quote, but I asked the underwriter what steps the manager and board could take over the next year to make them reconsider providing coverage. We came up with ideas that I shared with the community manager. What happened over the course of the next year was a perfect example of how, through hard work and cooperation, community association boards can turn things around.

So how did they do it? What did this community accomplish that allowed them to move from an expensive surplus lines carrier to a preferred carrier, like Farmers, in just one year?

First, they switched from armed security guards to an unarmed patrol. According to an article by Gabrielson, R. and Walter, S. “FBI Bank Robbery Data Shows Armed Guards Increase Risk of Violence,” 64 guards were hurt for every 1,000 incidents when armed, compared with less than one injury per 1,000 incidents when they were unarmed, only one example of why armed guards raise a red flag for insurance carriers. In most cases, armed guards become a deal-breaker for the association to receive coverage from a preferred (and often more cost-effective) carrier.

Second, they reached out to the fire department for help. After three fires in two years, none from the same cause, they came up with ways to communicate the importance of fire prevention to their unit owners. They sponsored community-wide dryer-vent cleaning and adopted rules regarding the dryer vents. They wrote articles for the newsletter and talked about it at meetings.

Next, the board approved a contract to remove trip hazards throughout the community. They continued to work with the fire department, inviting them to attend meetings.

Throughout the year, the manager and I kept in contact for updates. A new manager was assigned, and she worked along with the previous manager and me to keep things moving in the right direction. When the insurance renewal date approached, we had a list of items that the board had proactively completed to show to the underwriters. It certainly helped that there were no new claims over the course of the year.

The underwriting team was impressed. They appreciated the commitment of the board of directors and the community managers and rewarded that commitment with a premium that was less than $84,000. The previous budget had been over $150,000!

I asked the manager if I could share their story as inspiration for other communities in similar situations. Here’s what she had to say:

To me – It gives hope that even though sometimes things don’t go as planned, with hard work and cooperation from all sides things can be turned around. Unfortunately, more than one claim happened at one time, but in the end, things got repaired, steps were taken to make things safer and in turn prevent future claims. So no matter how hard things may seem, there’s always a way back.

And there IS always a way back, if we are willing to work together to create the path.

Terri Guest, CIRMS, CMCA is the Northern California Sales & Marketing Representative for Berg Insurance Agency and may be reached at terri@berginsurance.com.