INSURANCE - THE POWER OF KNOWLEDGE IN MANAGING COMMUNITY ASSOCIATION RISK
by Paul Borup, President, SentryWest Insurance Services
Nearly twenty-five years ago, two Community Associations set out on remarkably similar paths. Each was guided by dedicated volunteer board members committed to protecting their communities. Each carried the same fundamental responsibility: managing risk on behalf of their homeowners.
At first, these associations looked almost identical—similar size, similar assets, similar budgets, and similar goals. But as the years passed, a significant difference emerged:
- One association struggled with rising premiums, unexpected exclusions, and difficult claim outcomes.
- The other enjoyed stable insurance costs, comprehensive protection, and smooth, well-supported claims.
What Made the Difference?
It wasn’t that one board was smarter, more experienced, or more well-intentioned. Both wanted the best for their communities.
The difference was knowledge—what each board understood about insurance, and how effectively they applied that knowledge. That is the purpose of this article: to equip CAI members with insights they can use to strengthen and protect their communities.
Who Should You Accept Advice From?
The broker your board chooses can influence the financial stability of your association for years to come. Insurance is often treated as a commodity, but it absolutely not. It’s not a simple bag of white rice where only the packaging differs. Yes, price matters—but do you fully understand what you are receiving?
A strong broker brings far more than quotes. Look for one who specializes in Community Associations and provides meaningful value, including:
- A thorough review of governing documents to ensure insurance compliance
- Accurate property valuations based on current construction and market data
- Identification of commonly overlooked coverage gaps
- Strategic marketing to carriers to secure the strongest terms available
- Advocacy and guidance throughout the claims process
- Ongoing education to support informed and confident board decisions
Knowledge That Protects Your Community
Today’s insurance landscape is more complex than ever. Rising construction costs, evolving liability exposures, carrier restrictions, and changing market conditions all contribute to the challenge. A quality broker helps your board stay ahead of these shifts.
Good insurance planning isn’t just about purchasing a policy—it’s about positioning your community strategically. This includes:
- Transparent conversations about coverage options and tradeoffs
- Understanding how reserve projects influence future premiums
- Identifying opportunities to leverage market trends
- Making proactive decisions that strengthen your long-term risk profile
What You Can Do
Insurance challenges are not going away. In fact, they will likely continue to grow. But with the right broker partnership, your board can navigate these complexities with clarity, stability, and confidence.
As Charlie Munger wisely said:
“You have to keep learning, because the world keeps changing.”
Seek out a partner who helps your board learn—not just someone who hands you a single data point once a year. The right knowledge, paired with the right advisor, will make all the difference for your community
