Why Multi-Building Owners Benefit from a Master Policy

Many people think of co-ops and condos (aka condominiums and co-operative buildings) when they hear the term “master policy,” which protects one building with multiple owners. The owners/members all contribute to an insurance policy that protects the building and grounds, except for the interiors of each residence.

But there’s another type of master policy that’s the inverse of that: a policy designed for single owners of multiple buildings that rolls up what would otherwise be separate insurance policies for each building.

Combining multiple buildings on a single policy (a master policy of scheduled locations) is one of the ways in which we help building owners in New York City save time and money. Scheduling multiple buildings on a single policy works much like adding a second or third car to your automobile coverage, or even like buying fleet insurance for a collection of vehicles. Some companies offer a discount when you bundle properties; others don’t. (Hint: We know which ones offer “package deals.”)

Master Policy Benefits for Building Owners

Beyond the potential savings, a master policy can offer other benefits to building owners.

Single insurance policy date

It’s more efficient to track and renew a single policy instead of managing individual policies several months out of the year. This approach decreases the chances that a policy will slip through the cracks.

Streamlined financial planning

Building owners also save time by evaluating coverage for the entire portfolio as a whole, instead of piecemeal. The expenses associated with each property can be broken out and invoiced separately to simplify the accounting process.

Scalability

Adding another building to an existing policy is generally a simple process, especially when you have an insurance partner who manages the details on your behalf.

Trackability

Having all properties on one master policy makes coverage easier to track and update compared to juggling multiple individual policies.

Flexibility

Coverage for each building can vary; owners aren’t locked into a single level of coverage.

Relationship

A master policy with a single company can lead to a closer business relationship between the building owner and the insurance company.

Standard coverage terms

All the properties on the schedule need to meet the insurance company’s underwriting guidelines for the specific policy. Meeting this important requirement makes it possible to provide standard coverage for all locations. This unified approach makes the process more efficient and places building owners in the strongest position for negotiating favorable rates.

Master Policy Misconceptions

A single-policy approach has many clear advantages. Unfortunately, because they are often less common, there are several misconceptions about combining policies on a single schedule.

Bad apples

Some people worry that having a property with excessive claims will result in cancellation of the entire policy, even for those properties with a clean history. In such circumstances, the “tainted” building can be dropped from the policy without penalizing the other locations. Owners can retain the savings from having other properties on one master policy.

Locked schedules

Similarly, people often don’t realize that you can add new properties to a schedule at any time. The insurance company charges a prorated premium to cover the remainder of the policy term. The renewal date remains the same for all buildings. Unlike with separate policies, a single due date (rather than multiple due dates) makes it easier to budget and helps ensure that coverage isn’t compromised by a missed or delayed payment.

Limited payment options

Another common misconception involves properties that include insurance payments in the mortgage. If desired, the premium for each individual property can be billed to the bank or the client.

Property schedules are not etched in stone. An insurance policy is an active file that can be adjusted at any time during the year, adding or subtracting properties as needed. And the billing for individual locations is equally flexible.

To learn more about the benefits of a multi-location master policy policy, or if you would like a free insurance review, call us at 877-576-5200