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 money. To be clear, this type of coverage is different from the master policy that protects condominium and co-operative buildings. In short, scheduling multiple buildings on a single policy works much like adding a second or third car to your automobile coverage. Some companies offer a discount when you bundle properties; others don’t. (Hint: We know which ones offer “package deals.”)
Beyond the potential savings, scheduling properties in this way offers other benefits to building owners:
- One 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.
- Easier 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.
- 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.
A single-policy approach has many clear advantages. Unfortunately, many misconceptions muddy the waters when it comes to 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.
- 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.
- 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.