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Disaster Preparedness for Associations

$1.790 trillion. That’s what the damage the 273 weather and climate disasters the United States has experienced since 1980 have cost property owners and insurance carriers. Already this year there have been 10 weather/climate disaster events resulting in over $1 billion in losses. If your association does not routinely review insurance coverage or have disaster preparedness and response plans in place, or it’s been awhile since they’ve been updated, now is the time to make sure your association is ready in the event of a hurricane, tornado, earthquake or other major natural disaster. Here are three tips to help you prepare.


diaster prep for association
 
1. Review your insurance coverage – Take a hard look at your insurance policies to ensure you have adequate coverage. Some state statues impose very little to almost no insurance requirements on associations. And even if you have what your state considers adequate insurance it might not be enough. Review past claims and see how much your association had to pay out-of-pocket for repairs. Consider all scenarios. Does your flood insurance only cover structural damage, or will it pay for repairs if your electrical system, plumbing or other utilities are damaged? Just because your property isn’t in a flood plain take a hard look at whether or not flood insurance makes sense. Over 20% of U.S. properties at risk of flood are not located in designated flood zones according to property data company CoreLogic. Talk to your insurance agent and attorney to ensure all insurance documents actually say what you think they do. One bad document can lead to financial disaster.
 
2. Create a pre-disaster plan – All associations should have plans in place detailing what to do before a disaster occurs. Critical components are ensuring important documents such as insurance policies and association records are secured in a safe place with copies stored online, taking photographs and videos documenting property conditions for insurance purposes, designating an out of state contact for the association and adhering to a strict maintenance schedule to make sure your property is as ready as possible to face any kind of disaster.

3. Create a post-disaster plan – Recovery can be a stressful, costly and time-consuming endeavor. Having a post-disaster contact list including board members, management, insurance agents, insurance adjusters, attorney, engineers and contractors will go a long way in getting your association and its members on the road to recovery. It’s also important to start a regular cadence of communications with owners to keep them updated on recovery efforts. Too little communication or incomplete communications can lead to disputes with owners.

No one can predict if and when a natural disaster will occur and what kind of damage it will result in but associations who take the time to prepare by regularly reviewing insurance coverage and creating and keeping updated pre- and post-disaster plans will be able to better safeguard their association and its members from financial devastation.

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