Joyce DabbsJune 23, 2022
For Immediate Release
All Owners
RE: Insurance and Construction Update
From: Board of Directors
Dear Owner,
The difficult process of obtaining insurance is now complete. We were able to secure $25M of property, liability, DO and wind insurance for $1,227,876.10. This includes a small charge for interest. The comparable number for insurance in the 2021 budget was $480,000. That means our insurance has increased 156%. $25M is an amount that we believe is adequate to protect our property given the fact we have all new roofs, new Hardy board and a new roof structure on the Nest. We are hopeful insurance cost will decrease over time without another catastrophic loss in our area. The board is reviewing all our budgeted costs looking for ways to intelligently reduce costs and considering an annual assessment for insurance to clearly separate our HOA fees from insurance, making our HOA fees appear more competitive to similar properties. This higher insurance cost works out to approximately $404.25 per month on a 2 BDR condo, or $4,851 per year. $270 for a 1 BDR or $3,240 per year. While not exact, this should give you an idea going forward. All of us that own property at the beach are sailing through a perfect storm of the highest inflation in 40 years and now skyrocketing insurance costs driven by the catastrophic results of hurricane Sally. It’s hard to find a way to lower cost in this environment, especially when your single largest budgeted item increases by almost 160% driving the total annual budget from around $1.8M pre-Sally to $2.8M post recovery. The math tells us that to recover the additional cost we would need to realize a 16% rate increase over our pre-hurricane rates. We know several owners that have raised rates more than 20% with no resistance or drop in occupancy.
Building Four and the Nest are nearing completion, but not complete enough to pass all inspections. Hopefully elevators can be inspected this week. The Fire Marshall is on vacation and will return next week if we’ve passed the elevator inspection. The inspection for the certificate of occupancy takes several days and can’t begin until after the Fire Marshall passes inspection. Once that’s completed, our insurance representative will need to inspect the property before it can be occupied. When we have a better estimate of the timeline, we’ll post it to all owners. At that time, we’ll carve out a week to let owners know when they can begin loading in their possessions and set a date for renters to be on property. This is all complicated by vacations over the 4thof July holiday. We currently estimate getting owners in mid-July and renters in the third week of July. These are tentative, subject to change and only provided as guidance.
Wendy Blevins
Licensed Association Manager
251-222-3758
[email protected]