The
increasing cost of insurance is difficult to pass on to the tenants
because of the present economy. So an alternative plan must be used to
protect the property and reduce present expenses.
The
insurance agents do not normally understand the intricacies of property
ownership and cash flows. Their focus is on sales and selling what the
insurance companies want to sell--high premium and reduced
protection--not on what the owner’s needs are.
Our
view is directed towards the owner's prospective by designing plans that
are effective for them. We work with insurance agencies to help them
implement our plans that are effective, efficient, and economical for
the owners. We negotiate rates, pricing, and coverages with the
insurance companies.
An
example of this occurred when our client’s policies came up for renewal
September 22, 2001. The insurance companies wanted $950,000 to renew.
We made the necessary changes and the premium was reduced to $750,000.
This brought the cost per apartment unit down to $118.
This September 22, 2002 the same policies came up for renewal. The insurance companies
offered to renew the policies for $1,625,000. We started negotiations
with the companies seven days before the renewal date. After much
discussion and bargaining the cost was reduced to $1,157,000. This resulted is a savings $468,000 from the original offer, keeping the cost
per apartment unit down to $178.
How
much per apartment unit is your insurance costing you? If your cost is
over $178 per apartment unit click
here
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