Slide 2

The main ideas from this information are: - 90% of the premium for condo insurance comes from the property coverage. - To quote property with condos, an appraisal and wind mitigation reports are required. - The appraisal provides information on building values and construction. - Wind mitigation reports provide details on the roof and its attachments. - Current policies are important to review for mistakes and to understand the client's needs. - Insured values and co-insurance clauses determine the coverage and potential penalties. - Deductibles, particularly for wind damage, are negotiated and can be a percentage of the insured value. this over a little bit. 90% of your premium comes from item number one. So if you write a $100,000 policy, $90,000 of it is going to come from the property, thereabouts, right? So it's somewhere around 10, 11, 12% that all of these other coverages fill. So the most important part of a condo is the property, right? That's where you have to negotiate all of the premium. Now, will you be able to negotiate premiums, coverages, ancillary benefits, et cetera, on two through 10? Yes. But where are you going to win the account? Most of the time. Most of the time, you're going to win the account through the property. Okay. So what do you need to quote property with condos? If you're going to quote the property with condos, you have to have an appraisal. You have to have win-mits. Have to. Those two are an absolute requirement to quote. All right, we'll get into that in a second. The third one that we would like to have, and it shows that the client is serious about it's actually quoting, is the current policies. Okay? So I'm going to spend some time on each one of these. The appraisal is going to give you the breakout of the buildings, the construction, and the values. So on the appraisal, and to put onto the appraisal, it should be done within the last three years. Okay? Under 718 condo law, under 718 condo law, you are required to have an appraisal on file that's been done in the last three years. So let's give an example. What's the date today? The 12th? 13th? Okay. So it's the 13th of June, 2023. That means that you can go all the way back to when? And answer this question. It's got to be done in the last three years. When can it go back to? 2020 to 21, 21 to 22, 22 to 23. So June of 2020, you can go back to. Now why is that advantageous in today's market? What has happened with construction prices in the last three years? They've gone through the roof. Okay? So if you have an appraisal that is three years old, or just around three years old, you can still get agreed value, right? No coinsurance, we'll get into that in a little bit, on the policy with an appraisal that is three years old. If it's more than three years old, can we still get a quote? Yes. But what will they put onto the policy? Underneath the property, they're going to put a coinsurance on the property, and we'll get into that in a second. All right? The second part that's most important about the appraisal is it tells you the construction. All right? So on the construction, let me erase this, it's going to tell you each one of the buildings, okay? What they're made of. So they can be fire-resistive, masonry non-combustible, we'll get into all this stuff. They can be JM, it could be frame. Okay? Whatever they're made of, it's going to have it in there, and it's going to say on the appraisal what the building is made of. Now, a residential building, let's say you have a condominium association that has seven different buildings. One residential building could be masonry non-combustible. Okay? One could be frame. One could be JM. They may all be JM. They all may be frame. Right? We don't know what it is without having the appraisal, and what the carrier is going to use is they're going to use the appraisal. So as an example, M and I earlier this year went to an association, saw that that association was listed as frame in the appraisal, and the current agent had it rated as JM. Do you think that would be a problem? Huge problem. Right? We fixed the problem, we picked up the account, and we're good to go. Okay? Because the other agent hadn't caught, maybe they didn't know or whatever the deal was, that they had rated a frame building, actually 42 frame buildings, as choice to masonry. So the premium difference on that to them, had they been caught post-binding, which they would have been, was over $500,000. We were able to write it with another carrier as frame for less than what the renewal was rated as JM without them having to take the risk of having a $450,000 or $500,000 increase. The next part is the windmills. And you need a windmill for every building. Okay? It cannot be a windmill just for, there's seven buildings, there's seven windmills. Every building is rated individually. Right? Because one building that's masonry non-combustible versus a building that's JM, each one of them are going to have a windmill with separate credits that go onto the windmill. Now, what does the windmill tell you? The windmill tells you when the roof was last redone. It tells you how the roof is attached. Are they using clips? Is it flat, concrete, structural? Are they using wraps? Are they using toenails? How is the roof connected to the structure? In addition to that, it will tell you if there's a secondary water resistance barrier. SWR will be marked onto the windmill as well. All of this is credits that they utilize to lower the premium, number one, and number two, qualify it with the carrier for the property. There are some carriers, for instance, that will write JM so long as JM has a roof that has been updated in the last 15 years, and that roof has at least a minimum of clips. Some of them will come back and say, that's great, it qualifies, but it's toenails so we won't accept it. Okay? So, you have to have these for every building, each building, and they have to be updated in the last five years. Windmills have to be updated in the last five years. So, how have we been winning some of the accounts this year? Some of the accounts this year that we've been winning, we've been going out to them and saying, hey, you have an appraisal, but your windmills are seven years old. Oh, well, my current agent didn't tell me about that. Okay, well, no problem. Let me go ahead and fix the problem. Right? I'm going to, I absolutely am going to be able to help you. The worst thing that you've got, the worst option that you have, is what your current agent is going to give you. I know that I'm going to make it better because they're not doing the correct work here for you. So, let me take over the current policies. We're not doing all the work without them giving us control of the policies. Right? Because all we do is go do all the work, teach the other agent how to do everything, and then the other agent says, thanks a lot, single source, we really appreciate it. Right? If they're not willing to change to you after you've shown them all of the incorrect items that the current agent is doing, then you get up and walk away. It's a total waste of time. Okay? So, we take our team members that we have, we've got about four or five different people that we can refer out, and we go and get the windmills done. And we go and find what the agent has done incorrectly, JM versus frame. Or they've got windmills that are eight years old, and they had the roostery done two years ago. So, they're showing windmills with a non-updated roof and not getting all the credits inside for the association. Okay? We have another one that we just did that to give a specific agency, it's a great agency, but the agent had made a massive mistake with stolen associates. They're writing an association on Indian Rocks Beach. They paid $54,000 last year. They were told a month ago that the premium for the renewal would be over $100,000. We went and researched it. They had a windmill that was like eight years old. It was showing a 1985 roof, even though the roof had been redone in 2003, and it had been recoded in 2016. So, we go out, we tell them to spend $200 to redo the windmill. They redo the windmill. We show that the permit had been updated. It was incorrectly filed underneath a unit, not underneath the actual building address. We quoted it, and we have a renewal in-house for $24,000. Happy? They're very, very happy. How many referrals are we going to get off of that? We're going to get a ton of referrals off of that. So, everybody looks down saying condos are a pain. Are condos a pain? Yes. Is there a ton of low-hanging fruit? The answer is abso-fricking-lutely. There is so much low-hanging fruit out there because the condo market, over the last seven or eight years or 10 years, even longer, has been incredibly soft. It's been easy. It hasn't been tough to write the business. Now, it's almost impossible to write the business. So, if you don't know what you're doing, and you're not utilizing all this stuff, and an agency comes in and does know how to utilize all this stuff, what ends up happening? We end up kicking their behind, right? And it's easy business to get done. You just have to do the work, and you got to have the knowledge on how to get it done. Okay, last part, current policies. What does this show if they give you the current policies? Number one, I already mentioned it. It shows that they're serious, okay? If they're just going to quote you, we don't need practice quoting, right? If they are asking you to quote the business or asking to give a second opinion, it has to be because something is going wrong. It has to be that the other agent's not doing their job, the other agent's not offering good renewals, the other agent's not giving them solutions, they're not doing the items that we're talking about with the appraisal and the windmills, et cetera. There has to be a reason. If they're just doing it, as some associations like to, they like to say, well, we like to get three quotes. In today's market, can you have three agents going out and getting quotes? No, it's impossible because the market's too hard and there's not enough carriers out there to do it. So, the conversation up front needs to be, if you are happy with your current agent and you do not want a second opinion and you're just quoting it out, you're wasting my time and you're wasting the other agent's time, you're wasting your time, nothing is going to come of it because the market is too hard for that to happen. If you are dissatisfied with what's happening with your current agent, then I'm asking you to allow us to go and do the work. We're going to bring our expertise to the table and we're going to help you. If they want three options, which it says that they should quote out and get three options per the bylaws and stuff inside the condo bylaws, that's fine. Are we going to bring them three options? Hopefully, maybe, right? Maybe if the building qualifies to get three options. Sometimes the building's only going to qualify to get one or two options. We have two renewals that I'm doing this week that we've got two options. We have the open market option and we have a citizen's option and that's all that they're going to get because that's how it is in the market right now. So, current policies shows that they're serious about quoting it. The second part of this is that it allows us to go and find the other agent's mistakes. How are we going to know what the other agent's done if we don't look at the other agent's policies, okay? It's not to steal or take from the other agent. The conversation is I need to go through those policies because 90% of the time when we review your current policies, we find a mistake somewhere and that's why you're bringing us in. It's not just pricing. You want to make sure that you have the correct coverages. You want to make sure that you've got the correct ratings, the correct discounts and everything built into your policies. In addition to that, are we going to be able to re-quote everything with brand new carriers everywhere? Absolutely not. Some of these coverages, somewhere in here, the current agent has probably at least gotten it right a little bit, right? So, we are going to want to utilize some of the current policies if we're chosen as the agent, right? Or if they're just like we're totally done with our current agent, but we need to know what they currently have so that we can take those over and we can start working on the renewal with those carriers. So, we have to have these three things when we're quoting them. Okay? All right. So, that brings us to values on property. Then we'll move on from property. Okay. When you do values on the property, on the appraisal, it's going to have each one of the buildings or the structures is going to have a value. All of those values added up together equal what the TIV is for the association or total insured value. All right? So, we'll just use $50 million as an example. Okay? We have $50 million of insured value. If you have an appraisal in the last three years, the carriers are going to write this as what is called agreed value. Meaning, we agree to insure these structures for a total of $50 million. Let's say there's 10 buildings and they're each $5 million. That means that each building, we are agreeing to insure to $5 million each. Five times 10, $50 million. Okay? This is the best way to insure the structure. Because what do you remove? You remove the chance that there's a coinsurance penalty on the policy. If there is coinsurance, which we're seeing a lot of people list on their policies, this is not a bad thing. Okay? And coinsurance is very misunderstood. Most people think if they see coinsurance on the building, it means that they're only insuring 80% of $50 million. That is not how it works. Okay? If they see 90% coinsurance, it means that they're insuring the building to 90%. So, if they have a loss, they only get 90% of $50 million. That is not how coinsurance works. Okay? When you write a policy, minus the deductibles. So, if you have a 10% deductible, your deductible per building is 10%. You had damage on every single building, your deductible would be $5 million. And we'll get into that. But your total insured value is whatever this number is. The coinsurance does not reduce it. It does not increase it. If you insure the buildings for an amount, that is what they're insured for. Coinsurance doesn't change what you're insuring the building for. What coinsurance does change, and you're going to see that coinsurance will have either 100, 90, 80, and very rarely, almost impossible now, 70%. And that will be listed on the structures. And what that means is that if it's not agreed value, it means that the value of the structure that you're insuring must be within this percentage of the actual replacement cost at the time of loss. So, let's use some round numbers on that to make this easy. You have a building that's insured for $1 million. There is an 80% coinsurance clause on the policy. That means that the building has to be insured. This is the replacement cost. I want to make this very clear. This, at the time of loss, is the replacement cost. The building has to be insured on the policy for at least $800,000. Does everyone see how I got to that? Okay? It's 80% of what the replacement cost is. So, if we do not have the building insured for at least $800,000, or the client does not have the building insured for $800,000, they are in violation of the coinsurance penalty. That is what coinsurance means. It is basically forcing insurers to insure the building within a certain amount of the replacement cost. Now, why do carriers do that? Carriers do that because they don't want to get into a fight with insurers that they have a million-dollar building, and they've insured it for $500,000. The thing has a partial loss, because we're going to get into partial versus full loss, right? Has a partial loss, and then the client comes out and says, well, I want a million dollars. To replace the building, it's a million dollars. Does that matter? No, it doesn't matter, because the maximum that they're going to pay is what? The maximum an insurance carrier is going to pay is what the building is insured for. That's the max. Then, if you have a partial loss, because if you have a total loss, what are they going to do? They're going to write you a check for the amount you insured the building. At that point, they don't care. If you've insured it for $500,000, that is your problem. They're going to give you a check for $500,000 minus the applicable deductible, right? If 25% of the building is damaged, and they come back and say, well, for that 25% of the building, it's going to cost, we'll just use a number, $500,000. Are they going to write you a check for $500,000? No, they're not, because what did you not insure the building to? You did not insure the building. If it's insured for $700,000, and there's an 80% co-insurance, did you meet the co-insurance requirement in this gap? No. They are not going to give you a check for $500,000. They are going to take what you insured the building for, divided by what you should have insured the building for, and then they're going to apply that applicable percentage to a participation that you as the insured participate in at the time of partial loss. So, it is not 100% insurance, because you did not have the building insured within the co-insurance amount. Now, what are we seeing lots of agencies write on their certificates and see in their policies? They are putting 100% co-insurance. Now, what do they tell everybody? Oh, it's fine. It's agreed at 100% value. No. Agreed value is 100% value with no co-insurance. If there's a co-insurance at 100%, that means that the carrier is saying you are agreeing that without an appraisal, because they don't have an appraisal on file in the last three years, and they're doing this on commercial properties as well. Without an appraisal, you are agreeing with us that you are insuring this building at 100% co-insurance, at 100% replacement cost. So, if you were off by $1 of the replacement cost, we've got a problem at the time of loss. You do not want to sell a policy, if it can be avoided, with 100% co-insurance. If we have an appraisal on file, we should be negotiating agreed value. If we do not, or the appraisal is more than three years old, we should be negotiating at least 90% or 80% co-insurance, because that gives us a little bit of wiggle room. Not a lot, but it gives us a little bit of wiggle room. 95% of agents, it's probably higher than that, cannot explain this to clients. This right here, they go, oh, agreed value. I'm paying more. Of course you're paying more, because you're not going to get in trouble with the issue that the current agent has over here. Now, do we have insurance with co-insurance at the agency right now? Absolutely, 100%, right? Can't be avoided, because if they don't have an appraisal, and we can't get to agreed value, their only option is to have a co-insurance percentage on their policy. When the insured takes the co-insurance, they sign off on it, they acknowledge that they're taking co-insurance, and they understand that they're taking the co-insurance that's on there, and some of them understand that they're okay with doing this. Now, with the market today, there are some carriers that are allowing agreed value, even though they know it's below the replacement cost, and that is because of the current market conditions, because they cannot obtain the coverage limits that are there. You have a $100 million building, they're doing agreed value, because they're only insuring the building for $50 million, and they understand that, they're accepting it, they're accepting up front, and what you'll see on the proposal is they're waiving co-insurance. Now, we don't love that, right? That's not the best thing for the client, it's not the best thing to sell, but in the current conditions of the market, it's out there, and it's available, and sometimes it's the only option for the client, okay? So, that is how the insured value and the co-insurance works for the policies with the property. The next part on the property is deductibles. Okay, on deductibles, the biggest deductible that is negotiated is wind. It is always a percentage deductible, 99.999% chance it's a percentage deductible, and there are different types of wind deductibles, and I'm going to put this in short form here. Okay, these are the deductibles that can be negotiated. This is the very best one. This means hurricane calendar year, meaning that if you have a 5% deductible, it only applies during a hurricane, and it only gets applied one time in a calendar year. So, if it is a tropical storm, if it is a tornado, if it's a thunderstorm, anything along those lines, the percentage deductible does not apply. The difference between hurricane calendar year and hurricane only, or just hurricane, or just hurricane without the calendar year endorsement, is that you would have to pay this deductible any time during the same calendar year that a hurricane hits. So, if you have two hurricanes, those are two separate occurrences, you would pay that 5% deductible for each one of the storms. The next one, which we're seeing as most common right now, is named storm deductible, meaning if it's a named storm, the deductible applies. It doesn't matter if it's a tropical storm, hurricane, etc. They do not, or we have not seen, there's been talks about it, but we have not seen it, where it says named storm calendar year. The calendar year we've seen with the carriers, they're only applying it to hurricane. We have not seen calendar year hurricane endorsement onto named storm. The last one is a wind deductible. So, on wind, the 5% applies, doesn't matter if it's a thunderstorm, doesn't matter if it's a tornado, doesn't matter if it's a hurricane, if it's a tropical storm. If wind causes the loss, the 5%, or 3%, or 2%, or 10% even, that we're seeing in today's market, applies to the loss. More importantly, where agents screw up, remember our TIV is 50 million. Does that mean that it's 50 million of insured value? I'm just checking on my time here. 50 million of insured value, insured value, I'm just checking on my time here. 50 million of insured value, does that mean that the 5% applies to the 50 million? No. The 5% applies, at least at this agency, the way we're going to write it, the 5% applies per structure. So, if you have 10 structures insured for $5 million each, and two of those structures are damaged, you do not pay 5% of 50 million. You pay 5% of 5 million, and 5% of 5 million. It's applied per structure. In addition to that, with the wind deductibles, if you have one of these, we are typically seeing that they put on wind what's called AOW. So, if you have a hurricane, calendar year hurricane, or your name storm, only your name storm, they are putting what's called AOW. This means all other wind. And instead of for it being the AOP deductible, which we're going to get to in a second, they say all other wind is $250,000. Is that per structure? The answer is no. That's per occurrence. So, the percentage deductibles is per structure. All other wind is per occurrence, meaning that you can have a tornado and a thunderstorm. We're going to get the tornadoes in a second because they can be confusing. A tornado in a thunderstorm in the summer comes and hits the association and damages six of the buildings. Do you pay a percentage deductible? Thunderstorm. If you have one of these, do you pay a percentage deductible? The answer is no, because it was not a hurricane. It was not a name storm. But it was wind. It was all other wind. So, the percentage does not apply. But the per occurrence deductible does. So, $250,000 would be paid, and then the rest of the damage would be covered by the policy. Same thing goes for all other perils. The all other perils deductible ranges anywhere from $2,500 to $10,000, typically. Sometimes they'll be a little bit higher, but they typically range $2,500 to $10,000. That is a per occurrence deductible. So, all other perils is everything other than wind and excluding flood. All other perils does not include flood. We're going to get the flood a little later. So, per occurrence, you have a fire. The fire damages two buildings. So, all other perils occurrence deductible is $10,000. You're going to pay $10,000. The policy covers it from there. The last one that they're putting in now is a water deductible. A water deductible is applicable not to flood, right? It's applicable to a pipe breaking in the wall and damaging the property. They'll have a specific deductible for water. Let's say it's $25,000. That's an occurrence deductible. So, every water occurrence, you have a water deductible of $25,000. Okay. These are sublimit deductibles or deductibles that they build in there that they're putting into the policies. Okay. Those are typically most of the deductibles that are into the policies. Okay. The last one that you would see possibly if they have the coverage is going to be sinkhole. This is rare, extremely rare that sinkhole is still included on the policy. And what they will have for sinkhole is they'll have a percentage or an amount, you know, $50,000 or whatever it may be for sinkhole. If sinkhole is not specifically listed on the policy, which is going to be the case for almost all policies in Florida now, you have what is called catastrophic ground collapse. So, why sinkhole has been removed from the policies is because of all of our wonderful litigious friends in the state of Florida. They started coming in and they started years, probably 10, 12 years ago. And they started saying, oh, that crack in the driveway over there, that's a sinkhole. Oh, that little tiny indention over there on the side of the 1975 building that's been sitting on limestone for the last 40 years, that's a sinkhole, right? They argued that normal wear, tear, deterioration was the cause of sinkholes. Now, what was sinkhole supposed to cover? Sinkhole was really supposed to cover, we're on the news, our building has fallen into the ground, Bay News 9 is on top of the structure and we're down inside the hole dealing with the internal earth with our building. So, they removed the sinkhole, most carriers have removed sinkhole. So, if you want to get sinkhole, it is almost impossible because it requires engineering reports and sinkhole reports and all this other stuff. And 99% of the time, it's not going to qualify. But there is catastrophic ground collapse included on every single policy in the state of Florida. Catastrophic ground collapse says that the building has catastrophically fallen into the ground. It cannot be lived in anymore. So, the building has been condemned or has been rated by the city or the county as non-livable, like get out of the building, which is what you do when it's falling into the ground. Hopefully, you're not in the building, like unfortunately, some people have been, right? That catastrophic ground collapse is covered. Okay? Those are the deductibles and the coverages that are in there for the property. Okay. So, we're doing on time. All right, I'm on track here. Okay. Next part, general liability. When you do GL, very simple, do not make general liability more complicated than it needs to be with a condo. It is rated off of number of units. That means if there's 300 units, 50 units, 17 units, 27 units, it doesn't matter. However many units are inside the building, where are you going to get that information? The appraisal. The appraisal tells you how many units there are. So, number of units, 200 units. Then, it's going to rate it off of the common area structures. So, common area structures are not the residential building or would be part of the residential building. So, they may have a fitness center. They might have a pool or a spa. I'm going to expand on that right now. If you rate a pool, that includes the spa. You do not rate the pool and spa separately. If you put a pool in, they give you the spa. They may have a beach, tennis courts. What's that, bocce ball? I don't know if I'm spelling this correctly, but something like that. Right? They'll have sport courts. Right? Okay. They might have a lake. Right? See that on there. Okay. And then they have, if it's a large association, they have road miles. So, some associations, like the larger one that I wrote in Bradenton earlier this year, they've got like four miles worth of roads throughout their association. So, they have road mileage. Now, every liability carrier will do this a little bit differently. Some of them want every single one of these things listed out, and they'll say tennis courts. We have three. They charge a flat rate for the tennis courts. Bocce ball, we've got one. A beach, we've got one. Pool, we've got three. Fitness center, we have two. And they list all of that on there. Okay. Coastal insurance underwriters is an example. There'll be an individual flat charge for each one of those items on the GL. Auto owners, for instance, includes all this stuff for the most part. Not the road mileage, but they automatically include in pool, it'll say on there, 200 units, residential condominium with pool, beach, sport courts. And they just give a price for doing all that stuff. Okay. When you're underwriting the GL with the account manager to shop in it, either renewal or new business, you're utilizing what to know that all of this stuff is at the location. The appraisal. The appraisal has everything. It tells you when they've had the sport court, how long it's been there, what the value of the sport court is, all of that stuff. Because if you've got tennis courts, do they want the tennis courts insured? Yes, for liability and for property. Right. It's on the appraisal. The GL is super simple. What exposures do they have at the location? Okay. Next part, D&O. See these ancillary coverages we're going to kind of fly through because they're relatively simple. Okay. D&O is directors and officers. Okay. Condominium boards are volunteer position. They do not get paid for being on the board. It's members of the association who are volunteering their time to be a board member. The boards will get sued either by unit owners or contractors that they've gone into a contract with where they're having a contract dispute or any other number of items that are out there. So, in order for the board to be protected, they have directors and officers coverage. Your D&O coverage is most typically a million dollars. That covers the board for when the board gets sued. If the association is sued, that's liability. Or if there's a property loss, that's property. This is if the board specifically is being sued. So, I'll give an example that we have dealt with last, I think it was last year, maybe the year before on a D&O claim. A board had signed a contract with an elevator service company. The elevator service company, while I agreed with the board, slid the language into the contract saying that it was a five-year guaranteed contract. They signed it. The relationship was not going well with the elevator service company. So, they canceled it, or so they thought, and they hired another elevator service company. The original elevator service company came back and sued the association. We had to put a claim in under the directors and officers because they said you signed a five-year contract. It doesn't matter if we followed through with what we said we were going to follow through with. Of course, they said they were. The board says they weren't, blah, blah, blah, blah. Hence, the lawsuit. The directors and officers coverage covered this. They paid out, I think it was $20,000 or something like that to the elevator service company for them to go away. That's a D&O coverage. Is selection of insurance a D&O coverage? The answer is no. The selection of insurance, what insurance they decide to purchase, is not a directors and officers coverage. They have to make the best decision for the association. They have to use the best fiduciary duty, but they can't come back and just say, well, we don't like what you selected for insurance, so we're going to sue you. Crime and fidelity. This is what bad agents sell. A full crime policy is what bad agents sell. A fidelity is basically employee dishonesty and theft. That's it. That's all it covers. You will go to associations and you will win hundreds of thousands of dollars in premium off of this one thing alone. Fidelity is the requirement for 718 condo law. You only have to have employee dishonesty and theft. Full crime includes employee dishonesty and theft, but it also includes wire transfers, incorrect checks, money on and off the premises, computer fraud, basically everywhere you're actually going to have a problem outside of an employee stealing from the association or a board member stealing from the association bank account. The difference in price, negligible. A couple hundred dollars a year. It's insane that you would only buy this. This is an agent that's only selling solely based off of price. How do you pick your limits? We have some that are as low as $25,000. We have some that are as high as multiple millions. The way that you pick the limits for the crime policy is what they have inside their bank accounts, because that's what you're really worried about being stolen. If you're an eight-unit association and the average that you're holding in the bank account is $20,000 at any one time during the year, a $25,000 limit on the crime is totally fine. If you're a 700-unit association and you're carrying $2 million in the account, you're going to want to write a $2 million crime limit. It's really just that simple. It's based off of what the association is carrying in their bank accounts. Now, where do you typically find that if it's a new association to you? You've got a copy of their current policies. On the current policies, they've reviewed it with the property manager of what their limits need to be. All you need to do is verify it, make sure that $250 in coverage is enough, or $500 in coverage is enough, or $1 million in coverage is enough. Now, why do you want to verify that? Again, you're going to win associations off of this, a very small coverage. It costs like $700 a year for a $50,000 policy, because most associations are doing assessments right now. They are carrying more money in their bank accounts than they have ever carried before. So, if you catch this and the other agent is not on top of it, which most of them are not, because it's an overlooked coverage, they're selling a ploy dishonesty and theft only. They've got it at $50,000 when the association's got $250,000 in their bank account, and they don't have a full crime policy. So, for the difference of $350 a year, you pick up a multi-hundred thousand dollar policy, because you're on top of making sure that the crime is written correctly. Okay? Last thing about the crime, D&O, we're going to have the property manager included in the coverage. So, we need to know who the property manager is, which we will, 99% of the time, we need to list the property manager on the coverage to make sure that they're covered as well. Now, most of the property management groups will have their own crime policies, which are primary, but you put the property manager on there so that they're included. Okay? They're, no, they're added as, like, underneath the coverage, it's added as property manager included under the coverage. Yeah. So, it's just an endorsement that's on there. Okay. Umbrella. This one, simple as well. Typically, $5 million is what a lot of associations will carry. There's associations that cover, you know, $10 million, $25 million, $100 million, $1 million, they're out there. The most common is $5 million. You typically do it based off of the size of the association. You look at the association, you see the size of the association, you look at the amount that they have for the umbrella coverage, but most associations just select the $5 million. It is not an expensive coverage so long as they have good loss history. If they've got loss history, the coverage very, very quickly gets expensive, and it gets very hard to place in today's market. The umbrella goes over top of the GL, the DNO if we can get it, not necessarily over top of the DNO every time, and the WC if they have it, which we'll get to. So, this just simply increases the underlying coverages. It's very straightforward, very simple, works like an umbrella everywhere else. Next is flood. And flood is very straightforward. It should be very, very simple for an association. People make flood for an association way more complicated than it needs to be. You have a maximum per unit of $250,000. That is the maximum you can purchase with the NFIP. So, if you have 10 units, you can buy $2,500,000 in flood. Does it matter that the building is worth $10 million? No. You cannot buy $10 million of flood with the NFIP. You can only buy $250,000 per unit or the insured value of the building if it is less than this number. So, if the insured value of the building on the appraisal, let's just say it's one building, right, as an example, is $1.8 million. Can you purchase $250,000 in flood if there's 10 units? No. It's a huge mistake that people think, oh, well, you just do $250,000 a unit. That's not correct. If you have 10 units and the insured value for flood, I'm going to get to that in a second, the insured value for flood is $1.8 million on the appraisal. How much insurance can you buy with flood? You can buy $1.8 million. $1.8 million. If the insured value for flood is $10 million, will the NFIP with the RCBAT program let you buy $10 million in flood? No. It lets you buy $250,000 per unit. If there's 10 units, you can buy $2.5 million. In the appraisal, do you see how many times I'm mentioning the appraisal? I wanted to just, like, grind that into your head, right? In the appraisal, there will be a hazard value. There will be a flood value. Why is the flood value higher? The flood value is higher because underneath 718 condo law and the RCBAT policy, the flood coverage includes built-in fixtures, wall covering, floor covering, interior of the units, not to include the owner's contents. Couches, clothes, beds, all of that stuff. TVs, et cetera. The contents are not covered, but the interior of the unit, cabinets, flooring, wall covering, et cetera, is covered underneath the flood policy. On the hazard policy, it is not. The master association policy for the residential structure stops at the wall covering. Stops at the wall covering. So, paint, wallpaper, flooring, everything on the inside of the unit is not covered by the hazard policy. It is covered by the flood policy. Therefore, the flood value will be higher than the hazard policy. The only one of the structures that the hazard policy will include the interior is common area buildings. Clubhouse, maintenance areas, gym areas if they're separate, all of that stuff. The residential building, the hazard policy stops at the wall covering. At the wall covering. Wall covering in the responsibility of the unit owner, except for if it's for flood. All right. How am I doing here? Okay. Hurry up. All right. Workers' comp. Workers' comp. If they have employees, we will have payroll. And payroll works just like any other workers' compensation policy. But 99% of the time, they don't have payroll. Here's your two codes. 9012, 9015. We write these on an if any basis. This is a, I think, $610 policy right now. It's very inexpensive. All right. For million-dollar limits. This one drives me nuts that agents don't do this. They write a $100,000 or a $500,000 policy. And they're like, yeah, I got you your work comp. It's $599 for $100,000. Why in the actual hell would you not take the million for $11? So stupid. Doesn't make sense to me. Just do it at the million dollars. We should do every one of the million dollars. It's crazy that you don't do it at the million dollars. All right. What this says is that if there is an injury at the site, most importantly, to volunteers and board members, if they get hurt volunteering for the association, this is the policy that responds. So, you know, Betty Sue decides she's going to go and do some gardening for the association. She starts digging up a bush that's got bees in it. She's allergic to bees. She gets stung a bunch of times, ends up in the hospital for a week. The workers' compensation policy covers that. Okay. There's a contractor that comes out to the location, tells them, yeah, don't you worry. My guys are covered by workers' comp. Contractor gets injured. 1-800-ASK-WHOEVER a month later comes back and sues the association saying you hired a worker to be at the location. You're going to say, but I hired Fred's Landscaping. Well, Fred's Landscaping was full of it. He didn't have coverage for his employees. That employee got hit in the leg by the weed whacker and needed to get 30 stitches and now he can't walk and he's disabled and all this other stuff that they come up with. What policy covers it for the association? Workers' compensation. Most associations do not know how this works. This is a good example of the crime policy. You pick up a couple hundred thousand dollar account because you're educated on selling them a $610 workers' compensation policy. Or more importantly, you tell them, well, let me just increase you from $100,000 to a million dollars and it's going to cost you a dollar a month. And they go, you got to be kidding me. You're giving me $900,000 and more coverage and it's increasing it for $11 a month or $11 a year. Okay. All right. Equipment breakdown. You can be late to MPI, Jordan. Equipment breakdown. Okay. This is included in property policies if it can be negotiated. If it's excluding equipment breakdown. The equipment breakdown is a separate policy. The example I can give of equipment breakdown would be like a surge through the association that's then damaged elevators or damaged the air conditioning units or the pool pumps or anything along those lines. You have equipment that is broken down because of a loss at the location. If equipment breakdown is excluded from property, which it can and cannot be, it will stay included or not included. You then purchase an equipment breakdown policy. They're super inexpensive. Travelers rights them. You do it through whomever. Doesn't matter who you do it through. They're a couple thousand dollars for like $60 million in coverage. Okay. Inland marine. Most common on inland marine is a golf cart. The golf cart is covered by liability. But the actual golf cart itself is equipment. It's association equipment. Last but not least is auto. 99% of associations do not own a vehicle. But if they do, you write a commercial auto policy, just like we write a commercial auto policy for anybody else. But 99% of associations will have, just write it right here, hired and non-owned auto on their GL. The hired and non-owned auto coverage is going to cover you or board members or property managers or anybody else driving their car who get into a car accident and then the association is sued because of it. All right. And then last but not least that I want to go through is ordinance and law. This is becoming more and more difficult to place. But you can get some ordinance and law coverage. Some carriers are including a very, very small limit. And when I say small limit, I mean like 10 grand. Right. Some of them are giving us full ordinance and law coverage. All right. And some of them are like meeting in the middle. But just so you know what ordinance and law is, there's A, B, and C. And there will be applicable limits to each one of the coverages. Your A coverage is for the undamaged portion of the building. The undamaged portion of the building to bring it down. So, you have a building and half of the building has been destroyed. They come out and they say you got to bring the building to the ground. You typically see that the A coverage, if we've got an option that's there, they give you what's called full A. So, if it's $60 million for the building, they've given you $60 million on the building. If it's $5 million on the building, they've given you $5 million. They've given you full A. Then they will give you a percentage of B and C. Typically, it's 10%, 5%, 2.5%. That's of the building value. So, if the building's $5 million and they give you 10% on B and C, that means you have $500,000 in coverage here. This is coverage in addition to the insured value of the building. B is to remove debris and C is increased cost of construction to bring it to new code. Agents make this way more complicated than what it should be. It's very, very easy. A is the undamaged portion of the building to bring that portion of the building down. B is the debris. Take it away. Take the debris away. And C is, I just know it as new code. Windows, electrical, plumbing, whatever it may be. Increased cost of construction for the new code. Now, B and C, where do you put all that money? You utilize it for C for the new code because you're going to negotiate something to get the debris taken away right at the time of loss. You're going to apply all of that to C, that limit. Now, if it's not written, this is how you'll see it. It will be full A, 10%, B and C. Or it will be $500,000, A, B, C. Meaning that they didn't give you full A. Meaning they gave you $500,000 for all three of them. Or it's like minimal coverage at all. Okay? So, this is what the ordinance and law is. This is a coverage that goes with the property. It's a specific coverage that goes with the property, but it is not available for every association out there. It's rare right now. If we can get it, we take what we can for the limits. We put it in there and we explain to the association what those coverages are so that they know that you're knowledgeable and they know that we're giving them the coverage, the best coverage that is out there, or the best coverage that's applicable to the association. All right? Okay. We're good. Okay. Questions on any of this stuff? PAR ports are a property coverage that will be listed as a separate coverage on the appraisal. If they're detached, they're a separate detached structure. If they're attached, they're part of the building value of the building they're attached to. It'll say it in the appraisal. It'll specifically say it in the appraisal, how the carports are treated. Attached or detached carports. No. It's a structure. It's an actual building. It's considered a building. It's considered a property coverage. The only difference is that if it's attached, it's going to be in the limit of the building it's attached to. If it's detached, they're just going to say, here's a carport. It's insured for $50,000. No. No. The equipment does not need to be attached to the building. That's a good question. Because if it is attached to the building, most carriers include it in the building value. If it's detached from the building, you need the equipment breakdown policy. Pool pumps. Pool pumps are a great example. If they have equipment breakdown excluded, you want to buy an equipment breakdown policy. If they've completely excluded equipment breakdown, then the carrier can make the argument about elevators and pool pumps and everything else that's there. Any type of equipment, functioning equipment, boilers, and anything along those lines, you want it to be included with an equipment breakdown policy. Boiler machinery is what it used to be called. It's now called equipment breakdown. Yes. Nine times out of 10, by the time you sit down and you knowledgeably go through this with an association, they're like, okay, this person, right, this agent, knows what they're doing. Because their current agent, unless it's maybe a handful or eight or 10 agents that are around town that are very, very good and can do this. I don't have any notes or anything. This is how I can go through it with an association and talk to them. They're sitting in front going like, holy hell, this guy knows what he's talking about. They want to do business with you at that point. Then what I do is I say to them, the market is very difficult. There are very limited spots that we can go. I've already seen in your current policies, there are some holes in your current policies. So, what I would like to do is not only market it to all of the different places that I would like to send it. I would like to take over your current policies because I'm going to need some of it to get you the best options in the market. I have already seen some holes in what we've discussed today where I can make some corrections and help the association with your current policies. I cannot make it any worse. I can only make it better. If you brought me here to make this better, then I need you to go ahead and select me. If you don't like what I do at the end of the day, you can send it back over to the other agent. But you've brought me here for a reason. If it's not just to shop and it's not just to waste my time and it's not just to get a quote, then you should go ahead and be comfortable with me moving forward and just taking the market and getting everything done, marketing it through the market, and bringing you the best option at the end of the day. So, yes, I push to get the AOR. They're not serious if they're not going to let you do it, right? But also at the end of the day, I'm not just walking in saying, hey, most agents walk in and say, well, you know, the market's really tough and if you want me to work on this, I need you to sign an AOR. I mean, that's like such a crappy sales technique, right? You need to go through it with them. You need to sit with them. You need to analyze what they have. You need to show them the knowledge that you have. You guys need to watch this video over and over and over again until this just becomes verbatim and it comes out. Because as soon as they know that they've got somebody sitting in front of them that knows what they're talking about, they don't care about the other agent. They're not worried about the other agent at that point. You've convinced them that you are somebody that can solve the problem. And once they know that, they're willing to sign it and move on. And if they'll select you as the agent, then you go and get the best options that are out there. So, now, if they won't sign the AOR, does that mean that I walk away and give up? Of course not. Because the chances are, what we are finding, is that the agents haven't marketed the account anyways. So, we get all the information. We don't ask for loss runs right away. We get it out the market. We figure out that the other agent hasn't even started marketing the thing. Then the follow-up meeting is to the association to say, with all due respect to your current agent, they've told you that they were going to market the account. They told you that they were going everywhere possible to get you options. I can confirm, with all due respect to your current agent, that they are not doing what they promised you they were going to do. Because the market is open. Now, if you want me to bring the best option to the table, now knowing that your current agent hasn't done the job you've hired them to do, I need a couple of pieces of your current policies. Your other agent is going to eventually come running back in here and say, oh my gosh, my team was behind. You know, we weren't able to market it. You know, it was just that this other agent went before we did. A bunch of excuses of why they did not do their job. And then I literally just pin it down on them and say, it is not my fault. And it is not my job to educate your current agent. It is my job to beat your current agent. You brought me in here to beat your current agent. I beat your current agent. I need you to break up with them now. Relationship's over. We're now dating. They're your ex. That's it. And then I pin it on them and say, it's time to do business. If they are not willing to do it at that point, I wish them the best and I move on. Right? Because if we've shown them that we beat the current agent, we've shown them that the agent hasn't done their job and they're still unwilling to leave, see you later. Right? It's a total waste. It's a complete waste of time. Now, I say that because I know you all know and I know our team knows that on condos and on certain size premium accounts at the agency, it should be marketed. At the 120 day mark or the 90 day mark or the 60 day mark, whatever it may be for each one of the carriers. Where do you guys kill us as the agent and kill the agency and the reputation that we have as an agent and an agency? I do exactly what I just said I'm going to do. Or another agent or an account rep says they're going to do exactly what I just said we're going to do. And I'm sitting there in front of the client and they go, well, we contacted Marsh and they said they had open markets. What am I sitting there going? Oh, well, you know, our, you know, the market's so tough right now and our team was running a little bit behind. And so we were going to send it there. And now we turn into exactly what we told them we were not going to be. Now we're the agent getting broken up with. We're the agency getting broken up with. Because there are agents that can do this. I'm not the only agent that's out there. Everyone in this room is going to be able to do this eventually, right? That's the whole point of trying to elevate where we're going as an agency and as individuals. But if we go make that promise and we tell a client we're going to do it and then we don't follow through with it, every single person here looks like a jackass. And then they're going to go tell the other board and the other board and their friends and somebody else's friends at the condo association meetings. And it just trickles down that single source insurance is just like every other agency out there. They make all these big promises. They get the business. And then once the business is on the books, they just kind of lackadaisically shop the market. Now everyone's going to come back and say, well, I sent it to Hull and Company. Or I sent it to RPS. Or I sent it to Amwins. And then they didn't do their job. We cannot be reliant. I know you guys have heard me say this, and I'll say it over and over again. Do not be reliant upon people outside of this organization. If they don't do their job, and then it makes us look like we didn't do our job. Does the client care about ABC Broker at ABCMGA? They don't care. They call us up and they say, what the hell, Zach? What the hell, John? What the hell, Owen? What the hell, Kaylee? You guys didn't do your job. And so now we're leaving you. So the reason that we're growing, and the reason that we're successful, is number one, we need to be the most knowledgeable agency that is in the market. And number two, we have to follow through with what we know works as an organization. And we know what works. Whether or not we do it is our responsibility to make sure that it's done. And so what we were talking about last week, and why we're doing these training sessions, is because you guys know that my level of expectations is extremely high. And what I felt like, as a leader of the agency, is that we weren't providing the correct training and the correct knowledge to then be able to execute at those really high levels of expectations. And that's why we're doing what we're doing right now. All right. Okay. Condos out. We're good. Co-insurance. I can do that again. Yeah. If anybody wants to stay for any other questions or anything, but that should be good for the video. Now, we're going to put these in a commercial drive. Dani's going to have these. She's going to put them in a commercial drive. It's going to be listed under the condos. One of the things we're going to do for condos for a training session in the future will be citizens specifically. All right. We're going to set an hour just specifically on citizens, how that works. Right. So you can go to the drive. You can see the video. You can watch this video over and over and over in that drive. And then you can go to certain sections of it. And again, and again, and again, until it ends up being knowledge in your head. All right. Is it good? Yes.