Panel: Sahouri, Paul Davis, and Rees Broome Discuss Claims Management

(Mclean, Virginia) - As part of its continued commitment to advocacy and demystifying insurance, Sahouri Insurance participated in a seminar on the complex issue of Claims Management. This seminar was held in partnership with Paul Davis Restoration and Rees Broome, PC, and sponsored by Clean Advantage and First Citizens Bank. The seminar focused on the commercial real estate domain of condominium and homeowner's associations which face a unique challenge in balancing the interests of multiple stakeholders. 

Crishana Loritsch, CMCA, AMS, PCAM, Relationship Manager at Sahouri Insurance provided a broad overview of the current insurance market and the qualities of the hard market – which are predicted to last well into 2026.

Claims for Community Associations

One can no longer assume that carriers will want to renew current policies. Recommendations for ensuring insurability include: 

• The implementation of a comprehensive risk management program including following the reserve study and not deferring maintenance. 

• Abiding by carrier recommendations issued at the time the policy is bound or renewed. Rather than recommendations, consider these to be requirements. 

Community associations may lose their coverage mid-term or have carriers non-renew if they are non-compliant with recommendations. With her years of property management experience, Ms. Loritsch reviewed the protocol for reviewing governing documents between the association board, tenants, and insurance broker. She also covered best practices when handling a loss: 

• Mitigate damage to property by promptly proceeding with remediation efforts
• Engage professionals who are licensed and insured to perform the/repair/restoration)
• Carefully track all costs incurred
• Ensure proceeds are applied to the insurance claim in accordance with the policy AND governing documents 

Claims from the Legal Lens

The seminar pivoted from a focus on risk management to the legal sphere as adeptly presented by the duo from Rees Broome, PC; Kristen Buck, Esq. and Molly Peacock, Esq. Community associations must understand their legal obligations; namely the duty of maintenance, maintaining insurance, and the obligation to file a claim when there is a covered loss. 

In addition, Mses. Buck and Peacock mentioned salient points highlighting the limits on an association’s liability and assessing the details of deductibles on an insurance policy. One of the key takeaways is that an association should have regular consultation with their legal counsel, keeping their governing state statutes in mind, to understand the answer to five who/what questions:

• Who files the claim?
• Who restores the property?
• What happens if the proceeds are insufficient?
• Who pays the deductible?
• What happens if the loss isn't covered under the Master Policy?
  
  

Furthermore, the insurance broker and carrier should receive the governing documents. Best practices include having a meeting with the insurance broker/carrier and the board to discuss necessary and optional coverages annually. 

Steps for a Successful Claims Workflow

A strong suggestion was made to have a visual diagram/flow chart that clarifies responsibility and shows how the claim process works for the individual association.  A recommended workflow includes the following steps: 

1. Prevent further damage: All property policies will require that you endeavor to prevent further damage. For example, in a situation in which there has been water damage due to a burst pipe turn off the water to the unit/building as needed and arrange to dry out units so that damages can be properly assessed. 

2. Obtain estimates for repair work quickly: If the cost of repairs plus remediation exceeds your deductible, then report your claim right away. The insurance carrier has the right, as per the policy contract, to view all damages prior to any repair work being done. 

• Date and time of loss
• Location of loss
• How many units were involved and the addresses for each
• Type of loss (for example, was this wind damage, a burst pipe, etc.)
• What property was damaged (i.e. did the wind damage the roof, or the burst pipe cause water damage in 3 units)?
• Amount of damage (if known)

4. Assist the claims adjuster in obtaining access:  Insurance adjusters cannot complete their file and issue payment until they are given access to view damages. 

5. Provide the adjuster with documentation to pre-approve repair work (bylaws, estimates, photos, etc.) 

6. Once the repairs are underway, ensure vendors provide clear invoices. Invoices should include date of loss, specific repairs completed, and for which units/addresses repairs were completed.  

7. If additional information is requested by the claims adjuster, respond in a timely manner. The adjuster will need detailed information in order to quickly address payment. Delays in finalizing a claim and releasing payment result from a claims adjuster waiting on previously requested information. 

The 3 R’s: Remediation, Repair, Restoration

Paul Davis managing director, Lauren Penn, was the final presenter at the seminar and her portion highlighted the role and importance of the 3 R’s: remediation, repair, and restoration. The immediate goal after a casualty is to prevent further damage and salvage damage.

After that is handled, an estimate of repairs and cost can be prepared. It is often useful for a community association to partner with a remediation company in advance and create a broad action plan in preparation for a worst-case scenario loss. Ms. Penn provided specifics related to property damage, trauma clean up, and fire/smoke damage.  

This informative seminar provided expert tips for community associations and was sponsored by Clean Advantage, First Citizens Bank, Paul David, and Rees Broome.