Insurance Summary
Aloha Nob Hill Homeowners,
As you are likely aware, property insurance premiums for condominium associations have skyrocketed recently. Your Board members have been working to get proper coverage at a reasonable cost.
Last year our Insurance Broker, Sue Savio, President of Insurance Associates, forecasted an increase of insurance premiums. As a result, we increased our insurance in the 2024 budget by 60%. Unfortunately, it looks like the cost of insurance has increased 5 times that amount. We have been talking with Sue Savio, as well as the Association's attorney, to determine our options and the best course of action.
We are hoping that this may help answer some of the questions that you have. If you have additional questions, we suggest that you reach out to your own insurance providers. Please refrain from calling or e-mailing the AOAO Nob Hill office to ask questions. Touchstone Properties and/or Board members are not qualified to give you insurance answers or advice.
We strongly urge you to send the enclosed Insurance Summary to your own HO6 Insurance Provider to review to make sure that you have adequate coverage for your own unit.
Insurance Renewal Frequently Asked Questions
Question: What happened to cause this large increase of insurance premiums?
Answer: Our Insurance Broker, Sue Savio, noted in a letter to the Board:
“Property rates throughout the US started to climb in 2019 due to prior years. Hawaii rates remained relatively low until 2021. Catastrophes in 2021 and 2022 caused increases of 20-50% on the average.
The cost of reinsurance has skyrocketed. As of October 10, 2023, there have been 24 confirmed weather/climate disaster events with losses exceeding $1 billion each to affect United States. These events included 1 drought event, 2 flooding events, 18 severe storm events, 1 tropical cyclone event, 1 wildfire event (Maui), and 1 winter storm event. Everyone in the US is paying higher rates plus the value of the replacement cost.
Many Associations have done no wrong, it is the catastrophic claims throughout America and the world.”
Question: What percentage of coverage do we have for our property replacement value?
Answer: Your Board members along with our Insurance Broker and Touchstone Properties have been able to secure insurance coverage for the full replacement value of our units. Please review the attached summary of coverage. Getting less than full coverage is not an option. The Association's governing documents and state law require we maintain full insurance coverage. Also, many banks and mortgage companies may refuse to write mortgages if the Association is under-insured, which would hamper the ability to buy or sell Nob Hill units, and worse, there is the possibility that existing mortgages could be called in.
Question: How are we going to pay this premium when we were not prepared for this large increase?
Answer: The Board is looking at multiple options, including a special assessment, increased maintenance fees, borrowing from the Reserve Account, or getting a loan. The final solution will probably be a combination of the above. The Board is also looking into ways to save money or delay expenditures, while also continuing to maintain the Nob Hill property.
The Board understands this is a lot to take in and regrets having to relay this terrible news. Your Boards intent is to provide you with as much information as possible. Please visit our AOAO Nob Hill at www.nobhillmililani.com. Click on Owner Resources and then Insurance Summary. We have posted some additional information on this topic to help answer further questions.
We will be holding a special meeting on 5/13/24 for owners to attend via Zoom. This meeting will include our Insurance Broker, Sue Savio, President of Insurance Associates. This meeting will allow owners to ask questions about this issue. As always, we will limit owner’s questions/comments to 3 minutes. Please register in advance via e-mail to manager@nobhillmililani.com.
In order for this increased premium to be paid, owners will be responsible for this new cost. This additional cost, as mentioned earlier, was not accounted for in our 2024 budget. The board is still considering all of the options for repayment by owners and will come up with the payment schedules as soon as possible.
We thank you for your patience as we work through this challenging issue. Please refrain from calling or e-mailing the AOAO Nob Hill office. If you have any questions, please reach out to your insurance provider to help answer further questions.
AOAO Nob Hill
Board of Directors
Letter from our insurance agent concerning the large increase in insurance premiums:
See attachments.
Property rates throughout the US started to climb in 2019 due to prior years. Hawaii rates remained relatively low until 2021. Catastrophes in 2021 and 2022 caused increases of 20-50% on the average.
The cost of reinsurance has skyrocketed. As of October 10, 2023, there have been 24 confirmed weather/climate disaster events with losses exceeding $1 billion each to affect United States. These events included 1 drought event, 2 flooding events, 18 severe storm events, 1 tropical cyclone event, 1 wildfire event(Maui), and 1 winter storm event. Everyone in the US is paying higher rates plus the value of the replacement cost.
Many Associations have done no wrong, it is the catastrophic claims throughout America and the world.
Aloha,
Sue Savio
President
Insurance Associates Inc