Sunday, March 30, 2014
2014 Wood siding repairs
Tuesday, March 18, 2014
Opening on the Board
There is an opening on the Kenthill Townhomes Homeowners Association Board. The Annual Meeting is March 24, 2014 at 7:00PM in the Cabana. Elections will be held at that time.
You should know that you have some of the most qualified, dedicated homeowners on any Board on the entire east hill of Kent. Some Board members either majored in accounting or have degrees, some have completed decades of office work, most have some kind of certifications or licenses, and at least one has multiple college degrees. The Board has accomplished an enormous amount of work; most of this is documented in detail on the Kenthill Townhomes website (now in its seventh year).
If you consider yourself a qualified, dedicated homeowner, and would like to join this group of qualified, dedicated homeowners, please prepare for the meeting. If you are elected, please prepare for a lot of work, a steep learning curve, many worthwhile challenges, and a rewarding sense of accomplishment (especially when difficult projects are undertaken and results are achieved).
All at no pay!
[It's volunteer! - The Bylaws of the Kenthill Townhomes Condominium Association state: “5.14: Compensation. Directors shall not be paid compensation for their services as directors”].
You should know that you have some of the most qualified, dedicated homeowners on any Board on the entire east hill of Kent. Some Board members either majored in accounting or have degrees, some have completed decades of office work, most have some kind of certifications or licenses, and at least one has multiple college degrees. The Board has accomplished an enormous amount of work; most of this is documented in detail on the Kenthill Townhomes website (now in its seventh year).
If you consider yourself a qualified, dedicated homeowner, and would like to join this group of qualified, dedicated homeowners, please prepare for the meeting. If you are elected, please prepare for a lot of work, a steep learning curve, many worthwhile challenges, and a rewarding sense of accomplishment (especially when difficult projects are undertaken and results are achieved).
All at no pay!
[It's volunteer! - The Bylaws of the Kenthill Townhomes Condominium Association state: “5.14: Compensation. Directors shall not be paid compensation for their services as directors”].
Sunday, February 23, 2014
About FHA approval
Here is some additional info about FHA approval:
Pros
1.FHA condo approval dramatically increases the pool of potential buyers. This means that
FHA approved Condos have a larger pool of prospective buyers, therefore increasing competition and demand for the product.
2.FHA Loans are Assumable. This means that in the future an FHA Loan can be assumed (including the interest rate) by a new buyer.
3.Marketability.
This means that some real estate agents won’t show units that are not FHA Approved. Being approved sets your community apart from others in your same area.
Cons
1.New Owner put less down on unit
2.FHA raised MIP to 1.25% which increases debt ratio for new buyer.
3.Need a certified person to get FHA approval which can be expensive.
Pros
1.FHA condo approval dramatically increases the pool of potential buyers. This means that
FHA approved Condos have a larger pool of prospective buyers, therefore increasing competition and demand for the product.
2.FHA Loans are Assumable. This means that in the future an FHA Loan can be assumed (including the interest rate) by a new buyer.
3.Marketability.
This means that some real estate agents won’t show units that are not FHA Approved. Being approved sets your community apart from others in your same area.
Cons
1.New Owner put less down on unit
2.FHA raised MIP to 1.25% which increases debt ratio for new buyer.
3.Need a certified person to get FHA approval which can be expensive.
Sunday, February 02, 2014
Sunday, November 24, 2013
Homeowners meeting cancelled
The homeowners meeting scheduled for Monday, November 25, 2013 has been cancelled.
Friday, October 18, 2013
Sunday, September 22, 2013
2013 Asphalt Seal Coat Project
An asphalt seal coat project was completed near Buildings K and L.
This completed work on a section of the property plat that was begun by Easthill Apartments in July of 2011. At that time, Easthill Apartments completed an asphalt seal coat project on their parking stalls, but no work was done on the nearby Kenthill Townhomes parking stalls (near Buildings K and L).
Sunday, August 18, 2013
Meeting Minutes
There have been questions regarding the monitary amounts stated in the monthly meeting minutes, and their respective headings under which these are classified. There have been changes to these headings. These changes first occurred beginning in January of 2013, in accordance with Federal and Washington State law.
The December 2012 meeting minutes included the following [I have omitted the actual amounts, in the interest of internet privacy/security for Kenthill Townhomes (please refer to your copies of the meeting minutes for actual amounts)]:
Operating Account + $500 petty cash $ xx,xxx
Security Deposits Held $ x,xxx [a requirement; this has to do with owners being behind on their dues]
Replacement Reserve $xxx,xxx
Total $xxx,xxx
Beginning in January of 2013, these headings changed.
Operating Account + $500 petty cash $ xx,xxx
FHA Insurance Deductable-in Operating $ xxx
Security Deposits Held $ x,xxx
Replacement Reserve $xxx,xxx
Total $xxx,xxx
The Accountant for Suhrco Residential Properties, LLC. explained the change, writing as follows:
"2013 Budget has #7150 for FHA Deductable: $5,000. This amount will need to be set aside in a separate account under the Operating Account on your books. $416.67 will be set aside into that account from the Operating Account, each month, so by December 2013, there will be the full $5,000 shown as set aside for the FHA deductable, per your budget."
Again, this is in accordance with Federal and State law. It is in the interest of Kenthill Townhomes to comply with FHA requirements. These assist potential buyers in acquiring loans in order to purchase condominiums at Kenthill Townhomes; compliance with VA requirements is also in our interest, in helping veterans obtain the necessary financial assistance that they need; the Board makes every effort to comply with these and other Federal, State, and local requirements.
The December 2012 meeting minutes included the following [I have omitted the actual amounts, in the interest of internet privacy/security for Kenthill Townhomes (please refer to your copies of the meeting minutes for actual amounts)]:
Operating Account + $500 petty cash $ xx,xxx
Security Deposits Held $ x,xxx [a requirement; this has to do with owners being behind on their dues]
Replacement Reserve $xxx,xxx
Total $xxx,xxx
Beginning in January of 2013, these headings changed.
Operating Account + $500 petty cash $ xx,xxx
FHA Insurance Deductable-in Operating $ xxx
Security Deposits Held $ x,xxx
Replacement Reserve $xxx,xxx
Total $xxx,xxx
The Accountant for Suhrco Residential Properties, LLC. explained the change, writing as follows:
"2013 Budget has #7150 for FHA Deductable: $5,000. This amount will need to be set aside in a separate account under the Operating Account on your books. $416.67 will be set aside into that account from the Operating Account, each month, so by December 2013, there will be the full $5,000 shown as set aside for the FHA deductable, per your budget."
Again, this is in accordance with Federal and State law. It is in the interest of Kenthill Townhomes to comply with FHA requirements. These assist potential buyers in acquiring loans in order to purchase condominiums at Kenthill Townhomes; compliance with VA requirements is also in our interest, in helping veterans obtain the necessary financial assistance that they need; the Board makes every effort to comply with these and other Federal, State, and local requirements.
Saturday, August 03, 2013
2013 Wood Siding repairs (con't)
Monday, July 01, 2013
Significantly raised cost of water and sewer:
Pre-arraigned agreements govern the division of various for Easthill Apartments and Kenthill Townhomes. Generally speaking, Easthill pays 60% and Kenthill Townhomes pays 40% of all shared invoices, under the Joint Access and Easement Agreement of 1976, signed by both Kenthill Townhomes and Easthill Apartments.
In 2012, The City of Kent significantly raised the cost for water and sewer to all citizens.
The Association has received the 2010 Kenthill Townhomes Audit from the Certified Public Accountant for Kenthill Townhomes, as well as the 2011 Audit.
The audit states that, for the year ending 2010, water and sewer costs totaled $60,577.
The audit states that, for the year ending 2011, water and sewer costs totaled $66,535.
Remember, these numbers reflects what we, Kenthill Townhomes, actually paid in 2010, and 2011, for water and sewer.
The audit contains 20 line items expenses. No other line item expense even comes close.
[Delinquencies are another matter].
[The audit for the year ending 2012 is not yet completed].
In 2012, The City of Kent significantly raised the cost for water and sewer to all citizens.
The Association has received the 2010 Kenthill Townhomes Audit from the Certified Public Accountant for Kenthill Townhomes, as well as the 2011 Audit.
The audit states that, for the year ending 2010, water and sewer costs totaled $60,577.
The audit states that, for the year ending 2011, water and sewer costs totaled $66,535.
Remember, these numbers reflects what we, Kenthill Townhomes, actually paid in 2010, and 2011, for water and sewer.
The audit contains 20 line items expenses. No other line item expense even comes close.
[Delinquencies are another matter].
[The audit for the year ending 2012 is not yet completed].
Monday, June 03, 2013
2013 fence repairs along east-west border
Waterbrook Apartments are located
directly to the north of Kenthill Townhomes.
Waterbrook Apartments owns the east-west metal fence located directly
north of Buildings M & O through L & K.
For many years, there has been a problem with trespassers, especially at
this location of the fence (see above photo).
Sunday, May 26, 2013
2013 Southeast fence
Thursday, May 02, 2013
2013 Roof installations continue
Sunday, April 21, 2013
2013 Wood siding repairs
Friday, March 22, 2013
Annual Meeting is on Monday, 7:00PM, in the Cabana
Dear homeowners,
We have a problem at Kenthill Townhomes. This problem has been occurring as long as I have been a member on the Board.
I joined the Board in 2002, shortly after purchasing my Unit. From 2002 to 2005, we struggled each year, prior to the Annual Meeting, to obtain the necessary number of homeowners, either to attend the Annual Meeting in person, or to sign and send in their proxies. Even in 2006, after the passage of our new, revised Declarations and Bylaws reduced the requirement to 25% (of the number of required homeowners), we still continued to struggle.
To be clear, according to Washington State law, and our Declarations & Bylaws, a minimum of 25% of the owners must attend, either in person, or by proxy. This is so that, again, according to Washington State law, and our Declarations & Bylaws, we can legally hold an annual meeting.
That is all this is about. Nothing more. At numerous other condominium complexes, at their annual meetings, they hold a distinct, specific vote. The members present, either in person or by proxy, vote on whether or not to raise the homeowners dues, or to perhaps have a special assessment. That is not the case at Kenthill Townhomes. That has never been the case at Kenthill Townhomes. That is never going to be the case at Kenthill Townhomes. These facts are written right in our Declarations & Bylaws.
The only "vote" that is taken at the Kenthill Townhomes Annual Meeting is the vote to accept the previous Annual Meeting's minutes. This too, is in accordance with Washington State law and our Declarations & Bylaws.
As I have said, I have been on the Kenthill Townhomes Homeowners Association Board since 2002. I became the President of the Board in 2005. At that time, most of the previous Board members either resigned, or resigned shortly thereafter. New homeowners took the offices of Vice President, Secretary, and Treasurer. You should know that you have some of the most qualified, dedicated homeowners on any Board on the entire east hill of Kent. Some Board members either majored in accounting or have degrees, some have completed decades of office work, most have some kind of certifications or licenses, and at least one has multiple college degrees. The Board has accomplished an enormous amount of work; most of this is documented in detail on the Kenthill Townhomes website (now in its seventh year).
But we need your help. What we need is not too difficult. We need you to do one thing. Each year, during the month of March, the Annual Meeting notice is mailed out to all homeowners. At the bottom of that notice is the word, “Proxy”. If you are unable to attend the Annual Meeting in person, we need you write a person’s name in the space provided that you trust (a known Board member’s name, or a good neighbor who is attending the Annual Meeting), write your Unit number in the little space, and sign and date it at the bottom. Then you need to give it to a Board member, or to your neighbor, or to mail it in to the property management company (Suhrco). [Again, this is only if you are not attending the Annual Meeting].
Each year, during the weekend prior to the Annual Meeting, I personally walk around the condominium complex, knocking on doors, asking homeowners to sign the proxies. Each year, without exception, as long as I have been on the Board, we just barely, and I do mean barely, have enough homeowners, either present at the Annual Meeting, or by signed proxies, to achieve the 25% necessary requirement. I do this rain or shine, every year - it’s the only way we have been able to meet the legal requirement described above, and proceed with the meeting.
Not doing this, not having a legal, fully attended (either by personal attendance or by proxy) Annual Meeting - jeopardizes the monetary value of each of our individual properties as well as that of Kenthill Townhomes as a whole. This is because potential sellers of Units at Kenthill cannot produce a document that shows we have legally met the requirement regarding Annual Meetings. This is also because potential buyers of Units at Kenthill would be wary of purchasing at a condominium complex that cannot produce a document that demonstrates that we have met the legal requirement regarding Annual Meetings.
I respectfully ask you to remember this very important letter I am writing. The Kenthill Townhomes Annual Meeting is scheduled for March 25, 2013.
Sincerely,
Thomas Flynn
President
Kenthill Townhomes Homeowners Association
References:
Washington State Legislature RCW 64.38.040 Quorum for meeting:
"Unless the governing documents specify a different percentage, a quorum is present throughout any meeting of the association if the owners to which thirty-four percent of the votes of the Association are allocated are present in person or by proxy at the beginning of the meeting".
Kenthill Townhomes Declarations Section 9.4.4 Quorum:
“At any regular or special meeting of the Association following the initial call of the meeting, the presence of twenty-five percent (25%) of Apartment Owners shall constitute a quorum, . . . “
We have a problem at Kenthill Townhomes. This problem has been occurring as long as I have been a member on the Board.
I joined the Board in 2002, shortly after purchasing my Unit. From 2002 to 2005, we struggled each year, prior to the Annual Meeting, to obtain the necessary number of homeowners, either to attend the Annual Meeting in person, or to sign and send in their proxies. Even in 2006, after the passage of our new, revised Declarations and Bylaws reduced the requirement to 25% (of the number of required homeowners), we still continued to struggle.
To be clear, according to Washington State law, and our Declarations & Bylaws, a minimum of 25% of the owners must attend, either in person, or by proxy. This is so that, again, according to Washington State law, and our Declarations & Bylaws, we can legally hold an annual meeting.
That is all this is about. Nothing more. At numerous other condominium complexes, at their annual meetings, they hold a distinct, specific vote. The members present, either in person or by proxy, vote on whether or not to raise the homeowners dues, or to perhaps have a special assessment. That is not the case at Kenthill Townhomes. That has never been the case at Kenthill Townhomes. That is never going to be the case at Kenthill Townhomes. These facts are written right in our Declarations & Bylaws.
The only "vote" that is taken at the Kenthill Townhomes Annual Meeting is the vote to accept the previous Annual Meeting's minutes. This too, is in accordance with Washington State law and our Declarations & Bylaws.
As I have said, I have been on the Kenthill Townhomes Homeowners Association Board since 2002. I became the President of the Board in 2005. At that time, most of the previous Board members either resigned, or resigned shortly thereafter. New homeowners took the offices of Vice President, Secretary, and Treasurer. You should know that you have some of the most qualified, dedicated homeowners on any Board on the entire east hill of Kent. Some Board members either majored in accounting or have degrees, some have completed decades of office work, most have some kind of certifications or licenses, and at least one has multiple college degrees. The Board has accomplished an enormous amount of work; most of this is documented in detail on the Kenthill Townhomes website (now in its seventh year).
But we need your help. What we need is not too difficult. We need you to do one thing. Each year, during the month of March, the Annual Meeting notice is mailed out to all homeowners. At the bottom of that notice is the word, “Proxy”. If you are unable to attend the Annual Meeting in person, we need you write a person’s name in the space provided that you trust (a known Board member’s name, or a good neighbor who is attending the Annual Meeting), write your Unit number in the little space, and sign and date it at the bottom. Then you need to give it to a Board member, or to your neighbor, or to mail it in to the property management company (Suhrco). [Again, this is only if you are not attending the Annual Meeting].
Each year, during the weekend prior to the Annual Meeting, I personally walk around the condominium complex, knocking on doors, asking homeowners to sign the proxies. Each year, without exception, as long as I have been on the Board, we just barely, and I do mean barely, have enough homeowners, either present at the Annual Meeting, or by signed proxies, to achieve the 25% necessary requirement. I do this rain or shine, every year - it’s the only way we have been able to meet the legal requirement described above, and proceed with the meeting.
Not doing this, not having a legal, fully attended (either by personal attendance or by proxy) Annual Meeting - jeopardizes the monetary value of each of our individual properties as well as that of Kenthill Townhomes as a whole. This is because potential sellers of Units at Kenthill cannot produce a document that shows we have legally met the requirement regarding Annual Meetings. This is also because potential buyers of Units at Kenthill would be wary of purchasing at a condominium complex that cannot produce a document that demonstrates that we have met the legal requirement regarding Annual Meetings.
I respectfully ask you to remember this very important letter I am writing. The Kenthill Townhomes Annual Meeting is scheduled for March 25, 2013.
Sincerely,
Thomas Flynn
President
Kenthill Townhomes Homeowners Association
References:
Washington State Legislature RCW 64.38.040 Quorum for meeting:
"Unless the governing documents specify a different percentage, a quorum is present throughout any meeting of the association if the owners to which thirty-four percent of the votes of the Association are allocated are present in person or by proxy at the beginning of the meeting".
Kenthill Townhomes Declarations Section 9.4.4 Quorum:
“At any regular or special meeting of the Association following the initial call of the meeting, the presence of twenty-five percent (25%) of Apartment Owners shall constitute a quorum, . . . “
Thursday, March 14, 2013
City of Kent approves the LID, work begins
The Kent City Council, along with the Mayor, deliberated the proposed LID on 03-05-13.
Left click on this link to open it: http://kentwa.iqm2.com/citizens/default.aspx?#
Scroll down to where it says, "March 5, 2013 7:00PM". Look all the way over on the right. Left click, where it says, "Video". A new window will open. Left click where it says, "Windows Media Player". There will be a long pause, while the system thinks about your request. Eventually, another window will open. About two minutes of guitar music will play. If you want to skim this, slide the marker over to about 2:00 minutes. The video will begin with the Pledge of Allegiance, and a City of Kent Council member, “Roll Call”. The video quality is somewhat acceptable. The audio quality (not the audio volume) is low, and sometimes is very poor (especially when the Mayor is speaking).
[This, "shortcut" may or may not work: http://kentwa.iqm2.com/citizens/VideoScreen.aspx?Command=TryWmp&MediaURL=mms%3a%2f%2fMedia2.IQM2.com%2fa1607%2fo15%2fKentWA%2f1825.wmv
Shortly thereafter, the Council begins to discuss the Local Improvement District (LID) for the improvement and widening of S.E. 256th Street. Various engineers and other City of Kent personnel present pertinent information to the Council.
This video of the Council meeting is 3 hours, fifteen minutes long. So just skip to the important parts.
The Attorney for the City of Kent presents an explanation of how the possible minimum 60% Petition against the formation of the LID would work begins at minute, "1:53".
The Kent City Council elects to pass and form the LID at minute 2:19".
Left click on this link to open it: http://kentwa.iqm2.com/citizens/default.aspx?#
Scroll down to where it says, "March 5, 2013 7:00PM". Look all the way over on the right. Left click, where it says, "Video". A new window will open. Left click where it says, "Windows Media Player". There will be a long pause, while the system thinks about your request. Eventually, another window will open. About two minutes of guitar music will play. If you want to skim this, slide the marker over to about 2:00 minutes. The video will begin with the Pledge of Allegiance, and a City of Kent Council member, “Roll Call”. The video quality is somewhat acceptable. The audio quality (not the audio volume) is low, and sometimes is very poor (especially when the Mayor is speaking).
[This, "shortcut" may or may not work: http://kentwa.iqm2.com/citizens/VideoScreen.aspx?Command=TryWmp&MediaURL=mms%3a%2f%2fMedia2.IQM2.com%2fa1607%2fo15%2fKentWA%2f1825.wmv
Shortly thereafter, the Council begins to discuss the Local Improvement District (LID) for the improvement and widening of S.E. 256th Street. Various engineers and other City of Kent personnel present pertinent information to the Council.
This video of the Council meeting is 3 hours, fifteen minutes long. So just skip to the important parts.
The Attorney for the City of Kent presents an explanation of how the possible minimum 60% Petition against the formation of the LID would work begins at minute, "1:53".
The Kent City Council elects to pass and form the LID at minute 2:19".
Sunday, February 17, 2013
More Local Improvement District (LID) Project progress
On Tuesday, February 12, 2013, the City of Kent held another informational meeting at Kent Meridian High School. I attended the meeting. To make a long story short, it does indeed appear that the City of Kent is continuing to move forward with the various steps in the Local Improvement District process. Also, as I mentioned earlier, I have been viewing the City of Kent's website. The four engineers present at the meeting stated that there are many scheduled upcoming important events regarding this project. These include presentation to the City Council, approval, etc. These should start showing up on the City of Kent website. See the blog post dated 08-12-2012 for instructions on how to view the agenda.
City of Kent physical activity related to the SE 256th Street LID Project continues to be observed.
Sunday, December 09, 2012
Continuing LID information
Interested homeowners should view this sign. It is mounted on two 2 by 4's, and is located along the north side of SE 256th Street, in between KenthillTownhomes property and the apartment complex just east of Kenthill Townhomes [it is the one with the metal gate that opens and closes when its tenants drive in; called, "The Lighthouse" (fka, "Hazel Gardens")]. Kenthill Townhomes has a fence that runs east and west, along SE 256th Street. Then their fence begins where our fence ends. This sign is a little more near their property. I took additional pictures of the three pieces of paper that are affixed to this yellow sign. The pieces of paper seem to imply that the City of Kent is moving forward with the various steps in the Local Improvement District process. Also, as I mentioned earlier, I have been viewing the City of Kent's website. However, I have not seen much of anything new there yet.
Sunday, November 18, 2012
Rising insurance rates
Homeowners are strongly encouraged to view this letter from the Association's insurance company:
"Historically, commercial insurance premiums are cyclical. Underwriting and pricing are
influenced by catastrophe-related losses as well as the operating and underwriting
performance and investment income of insurance companies.
"The events of 9/11/11, for example, occurred during a time of already deteriorating
underwriting results for commercial lines insurers. The additional shock of 9/11 losses
catapulted the insurance market into afrenzy and resulted in huge pricing increases in
the reinsurance market beginning in January 2002. Higher reinsurance costs had to be
absorbed by commercial insurers and immediately resulted in higher insurance
premiums for community associations as insurance companies passed along the higher
costs. Premium increases of 35-50% and more wreaked havoc with association
budgets.
"During recent years, the insurance market place has once again become very
competitive and associations have enjoyed lower insurance pricing as has the rest of
the commercial insurance market place. So what might the future bring?
"Between 1953 and 2010 the average number of federal government disaster
declarations was 34 per year. ln 2010 the U.S. had a record number of 81 declared
disasters. As of September 30, 2011, there have been 86 disaster declarations with
three months still left in the year. 2011 is already the fifth or sixth most expensive year
of record for insured catastrophe claim payouts in the U.S. according to the National
Climatic Data Center.
"The high unemployment levels experienced in the current economic environment have
contributed to a substantial increase in claims. Higher unemployment means fewer
people with health insurance. As a result, community associations have experienced an
increased frequency of slip, trip and fall claims as residents look for someone else to
pay for their medical expenses. Financially strained communities have chosen to
submit small property insurance claims to their insurer for payment rather than selfinsuring
these incidents. lnsurance companies are reporting record numbers of claims
and the dollars paid out for claims has risen dramatically.
"A.M. Best reports that the U.S. property and casualty industry's underwriting and
performance have experienced significant deterioration this year. The result is that
industry net income fell 67% during the first half of 2011. At the same time, insurers
combined loss ratio has increased to about 110%. That is, insurance companies have
paid out in operating costs and claims about $110 for every $100 of premium collected.
"What do these hard facts indicate for the future of insurance premiums for commercial
lines insurers and in particular, for community associations? lf current trends continue
to erode insurance companies' financial position, the market place will change. Strict
enforcement of underwriting guidelines and diminished flexibility will result along with
higher premium pricing. Based upon past history, the question is not whether a
tightening of the insurance market place will occur but when that change will occur.
"The most recent insurance industry publications highlight articles entitled "Property
lnsurance Rates on the Rise", "Executives Cautiously Optimistic" and "Travelers CEO
Says His Company's Business lnsurance Rates Up Over 5 %." "Ongoing economic
uncertainty, weak investments and a spate of record-breaking catastrophes" are cited
by industry executives as factors that will turn the market in 2012 and increase
insurance premiums.
"CAU has successfully established a unique position in the market place which allows
community association clients to enjoy specifically tailored coverage at competitive
premiums. By maintaining sound underwriting principles, CAU will continue to offer
comprehensive coverage on a three year, guaranteed rate policy. The continuation of
the three year policy enables CAU's clients, upon renewal, to insulate their community
from the ups and downs of the insurance market place".
"Historically, commercial insurance premiums are cyclical. Underwriting and pricing are
influenced by catastrophe-related losses as well as the operating and underwriting
performance and investment income of insurance companies.
"The events of 9/11/11, for example, occurred during a time of already deteriorating
underwriting results for commercial lines insurers. The additional shock of 9/11 losses
catapulted the insurance market into afrenzy and resulted in huge pricing increases in
the reinsurance market beginning in January 2002. Higher reinsurance costs had to be
absorbed by commercial insurers and immediately resulted in higher insurance
premiums for community associations as insurance companies passed along the higher
costs. Premium increases of 35-50% and more wreaked havoc with association
budgets.
"During recent years, the insurance market place has once again become very
competitive and associations have enjoyed lower insurance pricing as has the rest of
the commercial insurance market place. So what might the future bring?
"Between 1953 and 2010 the average number of federal government disaster
declarations was 34 per year. ln 2010 the U.S. had a record number of 81 declared
disasters. As of September 30, 2011, there have been 86 disaster declarations with
three months still left in the year. 2011 is already the fifth or sixth most expensive year
of record for insured catastrophe claim payouts in the U.S. according to the National
Climatic Data Center.
"The high unemployment levels experienced in the current economic environment have
contributed to a substantial increase in claims. Higher unemployment means fewer
people with health insurance. As a result, community associations have experienced an
increased frequency of slip, trip and fall claims as residents look for someone else to
pay for their medical expenses. Financially strained communities have chosen to
submit small property insurance claims to their insurer for payment rather than selfinsuring
these incidents. lnsurance companies are reporting record numbers of claims
and the dollars paid out for claims has risen dramatically.
"A.M. Best reports that the U.S. property and casualty industry's underwriting and
performance have experienced significant deterioration this year. The result is that
industry net income fell 67% during the first half of 2011. At the same time, insurers
combined loss ratio has increased to about 110%. That is, insurance companies have
paid out in operating costs and claims about $110 for every $100 of premium collected.
"What do these hard facts indicate for the future of insurance premiums for commercial
lines insurers and in particular, for community associations? lf current trends continue
to erode insurance companies' financial position, the market place will change. Strict
enforcement of underwriting guidelines and diminished flexibility will result along with
higher premium pricing. Based upon past history, the question is not whether a
tightening of the insurance market place will occur but when that change will occur.
"The most recent insurance industry publications highlight articles entitled "Property
lnsurance Rates on the Rise", "Executives Cautiously Optimistic" and "Travelers CEO
Says His Company's Business lnsurance Rates Up Over 5 %." "Ongoing economic
uncertainty, weak investments and a spate of record-breaking catastrophes" are cited
by industry executives as factors that will turn the market in 2012 and increase
insurance premiums.
"CAU has successfully established a unique position in the market place which allows
community association clients to enjoy specifically tailored coverage at competitive
premiums. By maintaining sound underwriting principles, CAU will continue to offer
comprehensive coverage on a three year, guaranteed rate policy. The continuation of
the three year policy enables CAU's clients, upon renewal, to insulate their community
from the ups and downs of the insurance market place".
Saturday, September 15, 2012
2012 Asphalt Seal Coat Project
