A few owners have been asking about the status of our insurance coverage.
Here is the background: During a Board meeting on August 27, 2009, Sue Savio of Insurance Associates, the Ilikai AOAO insurance provider, presented details of the insurance renewal. The Ilikai’s previous insurance terms were to expire on Monday, August 31. So on Thursday, August 27, the Board was reviewing the insurance renewal terms. Apparently, they had done nothing prior to that. They literally waited till Thursday, August 27, with the insurance terms to expire on Monday, August 31. It was obvious that whatever Sue Savio presented to them was news to them. So the Board found itself in the situation when they either had to accept those new terms or have the AOAO without insurance. So they voted to accept the new terms. Some Board Directors stated that they were going to look into renegotiating the terms. To our knowledge, we are still stuck with the same increase.
Take a look at the Ilikai insurance for 2008-2009 and compare that with the Ilikai insurance for 2009-2010. This shows an increase of $137,801 in our insurance premiums compared to last year. Granted, we had a couple of incidents related to flood due to fire sprinklers. But not to solicit bids prior to the upcoming insurance renewal deadline?!
Also take a look at the coverage itself. We now have a deductible of $50K, compared to $10K last year, for “all perils excluding hurricane.” Even Sue Savio herself was raising concerns about such a high deductible, which she said was way higher than the norm of the industry and should be a concern. In practical terms, should we have an incident like the ones we had last year, we’ll have to pay $50K before the insurance kicks in. Also note the $5M coverage for Directors’ liability, which also includes the Management Company (Hawaii First). Why do they need $5M in liability coverage?
It sure seems like there is some serious business management issues. I agree with Hans, this should be on the business calender and reviewed. I would think with this type of expense, a preliminary RFP would be sent out 9 months before a contract ends, then screen it down to 2 or 3 companies, select one and be done with it at least a month before a contract ends. Maybe there is only one company who offers this type of insurance in Hawaii??? Doubtful.
Neal, there is definitely more than one company offering this type of insurance in town.
Olga : Please inform our lovely owners the truth that the home owners did not have a say as Anderson’s were the board and they released the original Insurance Agency that was lower for years.
We didn’t as owners have a say in that one. One of the board members at that time works for the Insurance Company that is insuring us at this time.
Rome wasn’t built in a day and we do have to give the new board a chance till March to do the things we all want.
you can print this on your website.
In the Directors’ and Officers’ liability section, it says that it includes coverage for the Management Company. Doesn’t Hawaii First have their own insurance?
Why would the AOAO purchase insurance coverage for Hawaii First? That seems utterly ridiculous and should be investigated, if true.
It seems to me that any AOAO insurance expiration date should be on the Board of Directors’ calendar. In addition, the insurance agent should not wait until 4 days prior to expiration to send out a reminder – unless of course this was done by design. It must be obvious to anyone that AOAO’s switch to another insurance agent was a mistake. It is time that the Board take its responsibility more seriously, if it wants to represent the interests of the owners.
IMPORTANT: I just received this morning A LOT of new information about our insurance from Mr. John Hall, who is a Board Director and who also works as an insurance agent for our current insurance carrier. He provides a lot more information. But I do have follow-up questions re some of his statements, and also disagree with some statements. That is to say I need time to write that, so I will post this this evening after work. Stay tuned. Obviously, the insurance is a “hot” subject. Discussion is good.