Insurance - Does it pay?|
Every condominium association needs condo fee
income to survive. These fees are kept in an operating
account or in a reserve account. If the money is
embezzled by either a trustee, a unit owner, or by a
manager the results can be disasterous.
Here are some recent examples of theft losses and
how they took place:
Financial controls go a long way towards
preventing theft. If you are unlucky enough to suffer a
loss then correct safeguards should uncover it quickly.
Common sense steps to
up a procedure with your bank to make it mandatory that
checks over a certain dollar amount require two
- Set up a system where the person who
reconciles the bank statements does not make
- Bank statements should be
reviewed by trustees monthly.
should have crime insurance. The coverage selections
under a typical crime policy include; fidelity, forgery
and wire-transfer. You can go to
our website for coverage selection definitions
Crime policies were originally designed for typical
situations where there are employers and employees.
Condominiums rarely have employees but very often do
employ a management firm. If you have a property
management firm you must be sure that your policy
includes a rider naming the property manager. Without
this endorsement the crime insurance will not cover
theft by the management company.
Are unit-owner's paying their monthly condo
fees through a website or a
third-party vendor? Crime policies will not cover
the third-party vendor. You should review what
crime insurance you have under these
Confused over how much insurance is enough?
First be sure that you are in compliance with the Condo law
and Fannie Mae's
single familiy 2009 selling guide
. These regulations
are only guidelines. We also suggest
you discuss what you need with your
insurance agent or your accountant. Make sure it
adequately covers the operating and reserve