Posted by Jon Berman on Fri, Feb 12, 2010 @ 03:10 PM
Most people in the real estate industry are not aware of this State Board. However, the regulations which it proposes and enforces has a direct bearing on all buildings located within the Commonwealth of Massachusetts. The board held its first meeting in January 1946 and as such, Massachusetts was the first state to create a uniform fire code.
In 1994, the Commonwealth of Massachusetts embarked upon a reorganization of the Office of Public Safety. As a result of that action, the Department of Fire Services was created in July 1996. The Fire Services Commission now has the responsibility of selecting a state fire marshal as opposed to the prior system of appointment by the governor. Stephen D. Coan is presently the State Fire Marshal and prior to being appointed to that position, had been the director of the Fire Training Academy, which is a nationally recognized facility located in Stow, Mass.
The Board of Fire Prevention Regulations, pursuant to Massachusetts General Laws Chapter 22D Section 4, is a state regulatory board charged with promulgating the Massachusetts Fire Prevention Regulations, 527 CMR 1-50 (also known as the Massachusetts Comprehensive Fire Safety Code). The purpose of this code is to prescribe the minimum requirements and controls to safeguard life, property and public welfare from the hazards of fire and explosion created by the storage, handling or use of substances, materials or devices or from other conditions hazardous to life, property and the public welfare.
The Board of Fire Prevention Regulations is comprised of 14 members in total with these members being appointed by the governor for a term of six years. The state fire marshal is a member who serves in an ex officio position. Along with the state fire marshal, the board is made up of three fire chiefs (chief of department) which must come from the Fire Chiefs Association of Massachusetts, a member of the Massachusetts Fire Prevention Association, four registered professional engineers, a representative of the public, a graduate chemist, an inspector of wires, a representative of the blasting industry and a licensed electrical contractor.
This board meets the first Thursday of every month in a meeting which is open to the public. The public has an opportunity to address the board to present any comments or proposed amendments to regulations at two statutory public hearings which are held each year. The board also holds public hearings at other times throughout the year, as deemed necessary in order to amend or repeal any regulations.
If you have any questions regarding the board and/or any fire prevention regulations, please contact Maura Ware, legal counsel and executive secretary to the board, Department of Fire Services, P.O. Box 1025, State Rd., Stow, MA 01775. Any persons interested in requesting formal interpretations of the board or to have proposed amendments that they would like the board to consider, should address their concerns in a letter to chairman of the board, V. Carlisle Smith, at the above address.
Posted by Jon Berman on Fri, Feb 05, 2010 @ 07:36 PM
Multi-family complexes include rental apartments, condominiums, and cooperative apartments. For insurance purposes, they have many common characteristics and some important individual differences.
Rental apartments are multi-resident buildings owned by an individual, partnership, or corporation. Condominiums include unit owners, who hold title to their living space and an association of unit owners that controls the common areas. In a cooperative, commonly known as a "co-op," the residents hold a life tenancy to their apartments and they own stock in the corporation that owns the building.
In all three formats, insurance should be purchased to properly cover all buildings, equipment, and related business personal property owned by the building owning entity.
The insurance policy should provide coverage for replacement cost, agreed amount clause, flood and earthquake, ordinance or law, code upgrade, loss of rental income, extra expense coverage, and back up of sewers and drains. Additional coverages may include: debris removal, preservation of property, fire department charges, pollution cleanup, newly acquired or constructed property, outdoor equipment, etc.
If multiple buildings are involved, a blanket insurance policy is recommended.
There are three levels of covered causes of loss which may be written: Basic Form, Broad Form, and Special Form.
The Basic Form covers losses caused by:
fire, lightning, wind, hail, explosion, damage by aircraft or vehicles, riot, civil commotion, vandalism, sprinkler leakage, sinkhole collapse, and volcanic action.
The Broad Form includes the perils of the Basic Form and also covers losses caused by:
falling objects, weight of snow, ice or sleet, water damage, and glass breakage.
The Special Form includes all risk of direct physical loss not otherwise excluded or limited. This Special Form provides the most comprehensive coverage and is the most desirable.
Since condominiums differ from rental apartments and cooperatives, they have unique insurance problems. A condominium owner will need to know if the condominium association requires "all in" coverage or "bare walls" coverage. The decision will be based on the condominium declarations and bylaws. The condominium declarations will determine who is responsible to insure certain elements of the property.
A most critical and valuable insurance coverage is "ordinance of law" endorsement. State building and zoning ordinances along with federal regulations have increased in recent years. These regulations create a potentially costly exposure apartment complexes, which are insured by Basic Form property insurance. If there have been important changes in building and zoning laws since apartment units have been built, then the cost to upgrade after an insured loss occurs would not normally be covered under most property insurance policies.
Three coverages are available:
1. Contingent Liability for Operation of Building Laws.
2. Demolition Insurance.
3. Increased Cost of Construction Insurance.
Some examples of upgrades may be: alarm systems, sprinkler systems, ADA ramps, railings, certain disabled persons issues, insulation, windows, asbestos removal, elevators, emergency generators, emergency lighting, etc.
Since many existing properties are "grandfathered" when the law changes, property owners need not comply until a new building permit is required for major repairs. This usually happens after a fire or other casualty loss occurs. Other issues to consider may be lease provisions, repair and maintenance provisions, coverage interpretations, crime exposures, and liability exposures.
After a loss, multi-family apartments may encounter some of the following problems: inadequate or non-existent coverage, lack of (or limited) business income, rental loss and extra expense insurance, insufficient limits of property insurance, a schedule of separate amounts per building versus blanket coverage over all buildings and lack of an agreed amount clause to replace the coinsurance clause.
An experienced and competent public adjuster can help you navigate these complex and often times confusing insurance issues.
Posted by Jon Berman on Fri, Jan 22, 2010 @ 01:06 PM
Ordinance or law coverage is an additional insurance coverage that may be added to an insurance policy for an increased premium. This coverage is essential for business owners and protects them in the event that a fire, flood, or hurricane damages their property and their insurance policy has a gap in coverage.
Certain property insurance policies exclude damage due to the enforcement of building codes or ordinances. This gap in insurance policy coverage may be closed by adding ordinance or law coverage to an insurance policy.
Ordinance or law coverage is trigged when all three of the following elements are present:
- a covered peril (fire, water, hurricane)
- causes damage to a building
- and the damages result in the enforcement of an ordinance or law in force at the time of the loss.
Essentially, ordinance or law coverage will allow an insured to recover for the cost of bringing a building up to code, even though the insured was not required to comply with the particular ordinance or law before the loss occurred. Without ordinance or law coverage, an insured would not be reimbursed by their insurance company for these potentially substantial costs.
There are three distinct coverages and each carries its own premium charge. They are:
A. Loss to undamaged portion of the building
B. Demolition cost
C. Increased cost of construction
Coverage A pays for the value of the loss of the undamaged building when enforcement of the building code requires demolition of the undamaged portion.
Coverage B pays for the cost of demolition.
Coverage C pays any increased costs of construction due to the enforcement of the building codes.
There is also an endorsement which pays for the business income loss during the necessary increased period of suspension of operations due to any additional construction time required to meet building codes.
Property owners need to do some research into local demolition and construction costs. They need to know at what point the authorities would require that undamaged parts of the building be demolished. Also, they need to study the codes to determine which would apply to the subject building. In this case, it would be easier to hire a code compliance consultant and/or licensed insurance adviser and have a survey done of the building.
Since the increased costs necessary to rebuild in compliance with existing codes may be substantial, you are best to be educated. As a real estate professional, you should be prepared for a catastrophe by purchasing adequate ordinance or law coverage to supplement your replacement cost policy.
Posted by Jon Berman on Fri, Jan 22, 2010 @ 09:54 AM
Property insurance policies invariably exclude property damage due to the enforcement of building codes or ordinances. This gap in insurance coverage can be closed by adding "ordinance or law" coverage. An insured may add ordinance or law coverage to their insurance policy by including two endorsements to their commercial property policy. These endorsements are : 1) Coverage to upgrade the building as required by laws or ordinances and 2) Coverage for the loss of income during the increased time it takes to bring the building into compliance with applicable codes.
For business owners, it is highly recommended for them to add both of these endorsements to their insurance policies. However, it might not be necessary for homeowners to do the same because their insurance policy may already contain such coverage. For example, in Massachusetts, most homeowners insurance policies contain a minimum of 10% of the building coverage as additional ordinance or law insurance. Therefore, Massachusetts homeowners would not need the additional endorsements.
A variety of laws could come into play when a damaged building is repaired or rebuilt, which may include local, state, and federal regulations. Also, there may be restrictions imposed by historical societies on buildings designated as significant and/or historical.
In many jurisdictions, there are requirements that a building with "major damage" must be demolished, even if part of the building may be salvaged. It is important for insurance policyholders to know what code requirements could apply as these may differ according to jurisdiction.
Fortunately, the insurance industry has created insurance policy endorsements that a property owner can purchase. For an additional premium, insurance policyholders may add the endorsements to their insurance policy, which will provide coverage for this exposure.
Posted by Jon Berman on Tue, Jan 19, 2010 @ 03:02 PM
Almost every state, including the District of Columbia, has specific licensing requirements and regulations for those seeking to become a public insurance adjuster. Similar to the requirements of a lawyer, a public adjuster licensed in one state only permits a public adjuster to practice in that particular state. However, a public adjuster may simultaneously hold licenses in other states if he or she fulfills the licensing requirements of each state.
It is very common for a public adjuster to be licensed in multiple states, including states within close proximity of their home state. For example, a public adjuster who is licensed in Massachusetts will often times be a licensed public adjuster throughout New England. Moreover, a public adjuster would be wise to be licensed wherever their real estate clients own property. For this reason, public adjusters in Massachusetts whose clients own property in Florida are often also licensed Florida public adjusters.
In Massachusetts, the requirements to become a public adjuster are governed by Massachusetts General Laws Chapter 175, section 172. In this state, an applicant must have two years experience performing services in connection with the adjusting of property losses. Additionally, Massachusetts public adjuster applicants must pass the adjuster licensing exam and be at least twenty one years of age.
Posted by Jon Berman on Thu, Jan 14, 2010 @ 03:50 PM
Most people who have damage to their property do not understand how to proceed with a property insurance claim. After a fire, flood, or hurricane, policyholders will file an insurance claim with their insurance company. The insurance company will then assign an insurance adjuster to the claim and the adjuster will meet with the policyholder. Many policyholders are under the mistaken belief that this adjuster is their insurance adjuster. However, this presumption couldn't be farther from the truth.
The adjuster assigned by the insurance company is the insurance company's adjuster, not the policyholder's adjuster. Often times, this company adjuster is a staff member of the insurance company or has been hired as an independent adjuster for the insurance company. In both of these scenarios, the adjuster represents the interests of the insurance company, NOT the policyholder. I have heard many insureds say "I already have an adjuster" in reference to the company adjuster. The notion that a company adjuster works for the policyholder is a dangerous misconception.
In reality, a company adjuster works for the insurance company. A company adjuster will do their best to minimize the claim, save the insurance company money, and search for ways to avoid paying insurance claims or possibily deny coverage altogether.
So how can an insurance policyholder level the playing field? They should hire a competant and well respected public insurance adjuster. A public adjuster will represent the interests of the policyholder. Often times, public adjusters represent homeowners, real estate management companies, and property owners. It is a public adjuster's job to zealously advocate on behalf of the insurance policyholder.
Unlike a typical policyholder, a public adjuster has experience filing insurance claims, technical insurance knowledge, and expertise in the insurance field. An insurance claim is essentially an ongoing negotiation with the insurance company. A public adjuster will be more capable of achieving a greater insurance claim settlement for the policyholder due to their reputation and relationships with company adjusters.
Among members of the insurance industry, it is widely believed that pursuing an insurance claim without a public adjuster is analogous to going to court without a lawyer or performing surgery on oneself.
You need a public adjuster to represent your interests after a fire, flood, or hurricane has damaged your property. Without a public adjuster, a policyholder will be engaged in an unfair fight.
Posted by Jon Berman on Mon, Jan 11, 2010 @ 08:25 PM
Many homeowners, real estate owners, and property management companies have had to deal with property that has been damaged by a fire, flood, or hurricane. After a fire loss, flood loss, or hurricane loss, it is necessary to file an insurance claim with your insurance company. As a property insurance claim increases in size, the procedure to recover a fair insurance settlement from your insurance company becomes more complex.
Most insurance policyholders do not have the time nor the expertise to submit a complicated insurance claim. Usually, insurance policyholders encounter problems in properly documenting and valuing their damaged property. If you're not an expert in property damage valuation or you do not have the time to reconstruct destroyed records, you may be in the uncomfortable position of having to accept the insurance company's settlement offer even though you know that the damage to your property may be greater than the insurance company's assessment. This is where a public insurance adjuster can help you.
Most insurance policyholders are not aware of public adjusters, who may be hired on a fee basis to represent the policyholder. Public adjusters advocate on behalf of insurance policyholders, who own residential real estate or commercial real estate. Additionally, public adjusters are knowledgeable in insurance property damage evaluation and insurance claim negotiations.
Residential building owners and commercial building owners hire public adjusters so that they may avoid hassling with their insurance company or solely relying on the insurance company's adjuster to offer them a fair insurance settlement. In many cases, insurance companies may be hostile, adversarial, and may attempt to deny liability for a policyholder's insurance property claim. It is a public adjuster's job to represent the policyholder during these difficult insurance negotiations.
Public adjusters perform a variety of functions, including reviewing insurance policy coverages, coordinating emergency repairs and post loss cleanup, suggesting strategies for reducing damage, and recommending appropriate courses of action to return your building or home to its pre-loss condition. But the most important function that a public adjuster serves is ensuring that a policyholder will receive a fair and reasonable insurance settlement for their damaged property.
Posted by Jon Berman on Fri, Jan 08, 2010 @ 11:27 AM
Most people buy property insurance to protect their business property. After a loss, trying to collect the full amount on an insurance claim may be a difficult exercise. Having the proper insurance coverage under your insurance policy can make this process easier in the event of a loss caused by flood damage (or water damage), fire damage, or hurricane damage.
As investment property owners, you should consider purchasing all risk insurance, which provides coverage for damages occurring from fire, water, windstorm, and vandalism. Additionally, property owners should purchase insurance coverage, which includes "demolition and increase cost of construction." This type of insurance coverage will cover property owners so that you may bring a building up to code after a loss occurs.
Other important coverages include blanket insurance, agreed amount insurance, loss of income including extra expense coverage, backup of sewers and drains, and possibly flood and earthquake insurance.
Property insurance policies normally contain many clauses and exceptions, which could have an important effect on a property owner's ability to collect an appropriate adjustment from the insurance company.
As a property owner, it is essential to have the right insurance coverage before a loss occurs.