Preparing-Your-Dallas-HOA-For-Inflation

Preparing Your Dallas HOA For Inflation

HOA Inflation Is Here

Preparing-Your-Dallas-HOA-For-InflationThere’s no denying it, inflation is here. Economists have been talking about it for a while now and the fact is it’s something we’re all going to have to learn how to work with. So what does that mean for your HOA? Well, it can mean a number of things from how it impacts your HOA, figuring out what your HOA can do, to compound benefits of inflation. Additionally, it can affect your budgeting as the cost of products and services are at an all-time high. To put that into perspective, they are the highest they have been in 40 years and show no signs of slowing down either. Read on to learn more about your HOA and inflation.

How Inflation Impacts Your HOA

Typically, unit owners within an HOA are likely pleased with the increase in the value of their homes. However, a high level of inflation is likely to have a potentially negative effect on the long-term financial health of the HOA.

At a professional level, expenses are going up for most HOAs. Landscaping costs are increasing as fuel prices rise and labor markets tighten. Property management, maintenance, and repair costs are also adjusting to reflect rising material prices and labor shortages. Along with utility bills getting more expensive due to the tracking of higher energy prices.

The board may find that their HOA is under-funded for a project budgeted many years ago. They only had around $1.2 million in reserves for the project and now face a $4 million shortage. This means current unit owners are taking the brunt of poor planning and higher costs.

What Can Your HOA Do?

Your HOA board should be planning ahead for large capital projects as costs begin to increase. With the addition of labor and energy cost increases, the issues with the supply chain continue to impact raw materials.

If your HOA board does not revisit outdated reserve studies, it is crucial to do so in light of current inflation rates. HOA Loans could be a very strategic approach for other tools to consider.

In light of the current inflation rates, HOA boards would be wise to revisit outdated reserve studies (if they don’t already do so periodically). A more strategic approach is for the board to consider other tools such as HOA loans.

For example, assume that an association anticipates a large capital project that will begin in a few years. Let’s say the cost of the project in today’s dollars is $10 million. If construction-related expenses increase annually by 10%, the same project will cost over $16 million in five years.

In this instance, an HOA loan makes perfect sense. Assuming that the HOA finances are healthy, the board can enter into a loan with a relatively low-interest rate. They can use the proceeds to complete the project today rather than wait five years.

Compound Benefits

If this project is completed promptly, the board can avoid future cost uncertainty. Loan-related interest payments for this project will then be considerably less than $6 million. The association would also eliminate the risks associated with future funding. If this HOA were to need a loan in five years, the interest rate environment would also be considerably less attractive.

Potential buyers would also be likely to discount the pricing uncertainty when a future project is necessary but left undone. Potential buyers are fearful of cost and financing uncertainty, not to mention general disrepair. Typically, home values are more likely to increase after a project has ended and when buyers can see community improvements.

Although inflation is rampant and prices are rising, the cost of debt has remained very low. Today’s Goldilocks scenario has created the perfect opportunity for HOA boards to think strategically about using debt to tackle large impeding capital projects. Perfect opportunities like this are not likely to remain available for too long. If your community is facing an imminent large capital project, let us help you strategize and model your loan options.

With inflation, HOA costs are rising as well, as we’ve discussed, due to labor and supply costs rising. But not all is bad news as financing is becoming cheaper! In many cases, the costs end up being a wash as we have a “Goldilocks” scenario. Classic Construction has a fantastic finance partner and we also have the ability to work on different maintenance plans for your HOA. Call us to schedule a meeting to talk about your HOA maintenance plan today!

Can-my-hail-damage-deductible-be-waived-or-is-it-a-red-flag

Can My Hail Damage Deductible Be Waived or Is It a Red Flag?

Can My Hail Damage Deductible Be Waived?

Can-My-Hail-Damage-Deductible-Be-Waived-or-Is-It-a-Red-FlagLiving in North Texas means dealing with heavy and constant hailstorms during the storm seasons. With hail damage to your residential or commercial property being at risk during each heavy storm, owners begin to raise questions about whether the damage can be waived or if it is a potential red flag. If you are wondering if your hail damage deductible can be waived, keep reading this article. We discuss who is responsible for hail damage, what can be considered a “red flag,” and how to appropriately report fraud.

Who is responsible?

We’re just going to put this straight – the homeowner is responsible for any and all deductibles that are part of his or her insurance plan. As of 09/01/2019 per Texas law, the state “requires property owners to pay the full insurance deductible they agreed to pay in their property insurance policy”. If someone comes knocking on your door offering a deal that includes your deductible, this should be a red flag for you! Here at Classic, we always ensure that we are following all Texas laws and regulations when it comes to repairs on your home or commercial property. Keep reading to spot the companies that don’t.

A Contractor Red Flag

Many contractors who purport to waive the deductible may either fraudulently report the costs incorrectly to your insurance company and/or cut corners by using lower-quality materials for your hail damage repair that keeps their costs low, provide a low-quality repair, and their pockets full.

At the end of the day – the insurance company will confirm that you paid your deductible before your claim is paid by asking for proof (a canceled check and/or credit card statement with the deductible amount). If the contractor “waived” your deductible – then you may be liable for fraud.

Reporting fraud

You may be tempted to call back a company that leaves a flyer claiming to pay your deductible as a means to save some cash, but for the reasons above, you probably want to steer clear! If you receive an offer from a company and something feels off, you should trust your gut! You can go so far as to report fraud to the National Insurance Crime Bureau to open an investigation. Typically, companies that make this offer are fly-by-night operators that are looking to profit from your distress after severe weather and major roof damage.

We’ve explained why you should never hire a contractor claiming to pay your deductible for roof repairs for a few reasons, including staying within the bounds of the law! Contact Classic for a reliable commercial and residential roofing contractor. Not only are we honest and trustworthy, but we have many years of experience under our belt, especially when it comes to hail damage. If you have further questions about when you as a homeowner are responsible for paying any and all deductibles reach out to us today for more information.

dont-wait-to-file-an-insurance-claim

Don’t Wait to File an Insurance Claim After Hail Damage

dont-wait-to-file-an-insurance-claimDon’t Wait to File an Insurance Claim!

Most homeowners who have recent hail damage on their roofs can file an insurance claim and receive some compensation, yet far too many people fail to do this. Some of them don’t know they even have hail damage on their roofs, while others might not think it’s worth the time and money to have it fixed. However, the most significant reason why so many homeowners don’t file an insurance claim after a storm is that they simply wait too long to act. By the time they realize how severely their roofs have been damaged, it’s too late to receive any compensation from their insurance companies. They must pay for the repairs out of their own pockets, which can get very expensive very quickly.

How Long Can I Wait to File an Insurance Claim for My Damaged Roof After a Hailstorm?

That really depends on your insurance, but most companies allow you up to a year to file a claim. Of course, that doesn’t mean that you should wait for several months before taking action. Your best bet is to file a claim as soon as you think your roof has sustained damage in a storm. The damage is still “fresh” at this time, which means it’s unlikely that anything else has caused any further damage. This will make it easier to prove that it was the hail that damaged your roof, and it will be much easier to repair the damage sooner rather than later.

Hail damage can take years to cause roof leaks and many homeowners put off getting an inspection or fixing damages. This is never a good idea. Here’s why:

  •  When hail hits an asphalt shingle it often knocks off the protective granule coating. Once the granules are gone, the protective layer underneath is exposed to the elements.
  • The sun’s ultraviolet light will weaken the exposed spots and make them brittle. These exposed areas are very susceptible to leaks.
  • Once leaks occur, the damage can be extensive due to potential damage from mold, electrical issues, ceiling and wall damage from water, and perhaps even personal property losses. The damage can also come very quickly and often is not initially detected.

Who is Responsible for the Costs of Additional Damage if I Decide to Wait?

While hail damage to your roof is covered by homeowner’s insurance policies, the additional damage caused by waiting to get repairs is not. Most insurance companies believe it is the homeowner’s responsibility to maintain their homes and take action to prevent leaks and subsequent damage. Therefore, if you wait until your roof is leaking to make a claim you could be footing the bill for all the major repairs.

Preventing additional damage to your home is one of the reasons why some (but not all) insurance companies have time limitations to file a claim. In fact, most policies state that claims should be filed “promptly” or “as soon as possible”. We also always recommend having a professional contractor assess the situation to prevent further damage and costs. Don’t forget, that you can always rely on Classic Construction for your roof damage and repair needs. Feel free to reach out to us today for any restorations that need to be done to your damaged roof caused by hail storms.

Insurance adjuster inspecting abandoned building

Why You Shouldn’t Secure Multiple Bids When Filing an Insurance Claim

How Insurance Claims are Processed

Insurance adjuster inspecting a building
Insurance adjuster inspecting a building

After a loss, or property damage, is reported to the insurance company, the claims department will first call their very own adjusters to assess the damages and provide an estimate on the cost to restore the damage. Sometimes, the insurance will recommend a contractor for you or you might be able to choose your own to complete the work. Wise contractors have worked with adjusters from a multitude of insurance companies and understand how adjusters come up with their estimates in order to help better estimate the final costs and get the best value.

It’s important that your contractor be in attendance when your adjuster comes to inspect the property. While Classic will never overstep or attempt to argue with the adjuster, we will help with the formalities of the meeting and ensure that you get the coverage you need based on the assessment. Our expertise in terms of damage is crucial to getting repairs covered, though the insurance adjuster will ultimately decide what damage is and is not covered by the policy.

The Estimation Process

The estimate process for a storm damage claim is fairly simple! Your adjuster will begin by walking the site and documenting the damage thoroughly and log all of the details into software so that it is well documented. Because adjusters work within the framework of the insurance companies, most expert contractors know exactly the types of constraints that they need to work within to make their estimation as accurate as possible.

Classic Construction & Restoration, Inc uses the Xactimate software, which helps us create a bid that is likely to match the insurance company’s assessment. Our estimators deliver the bids directly to our clients so they can submit the estimate with their claim to the insurance company.

Did you know?

Storms that cause catastrophic damage are oftentimes followed by storm chasers. When dealing with storm chasers, it is important to recognize what damage your property has taken on from the storm and how a professional can help. This knowledge will be useful when storm chasers offer outrageous deals on siding and roof repair that are likely to be of lower quality than what a professional contractor will offer.

Insurance companies may also bring in adjusters from out of state for wide-spread storm damage to facilitate quick turnaround time for the insurance companies and the homeowners. These quick-turnaround adjusters make fast assessments and move on to the next property. These estimates are often low and designed to move the process along quickly.

How Multiple Bids Can Cost You More

Clients will often get multiple bids from different companies to find the best price. Classic is priced fairly and in-line with industry standards, but oftentimes come back higher than competing bids – because we’ve been more thorough in our inspection and will seek to restore an entire structure, not just the cosmetic portion of the damage. We will also justify the full bid to the adjuster so the client doesn’t have to.

While insurance companies are not trying to cheat you out of compensation, they also want to keep their costs at a minimum. When presented with multiple bids, insurance company will always choose to go with the lowest one. This might in turn hurt you if further damages is discovered during the repairing process. Since the insurance company has already agreed to the (lowest) bid, they will not be responsible for any extra compensation that was not presented on the original bid.

Conclusion

It can be difficult to find a partner that you trust to ensure that your insurance claim provides the best case scenario to restore your property back to normal. By understanding the general process, it should help you be better prepared for discussions with your insurance company and any expert storm restoration contractors that would best fit your needs. Classic Construction & Restoration, Inc has the expertise to guide you through an insurance claim to make sure your damage is fairly covered, provided you call us BEFORE you file that claim! Call for a free estimate today!

Community Pool Hoa, blue pool and a railing to enter the pool

Suggested Community Pool Guidelines for HOA Leaders During COVID- 19

 Community Pool Hoa, blue pool and a railing to enter the poolAs local governments across North Texas start lifting stay-at-home orders, many property managers of HOA and apartment communities are feeling pressure from their residents to open their community’s amenities. This particularly applies to community pools as summer is now upon us.

But there is some trepidation amongst community leaders to do so, specifically
because of the liability issues that arise with their insurance companies. Most
insurance policies are probably unclear on their standards of liability when it
comes to national diseases such as COVID 19 as this is a trial unprecedented in our lifetime.

While we here at Classic Construction do not presume to be experts on what
insurance policies will and will not cover, we can say that we encourage you as a
property manager to speak with the insurance company and determine these
things.

In the meantime, if the pressure from your residents to open the community pool
becomes too great to resist, we have some guidelines that should help you stay in
compliance with the CDC pool guidelines and with social distancing.

First, consider setting up blocks of time for pool access that your residents can
sign up for. This will help you control the number of residents who enter the pool
area at one time and comply with social distancing. Additionally, you might be
able to further mitigate your liability risk by having residents sign a release of
liability waiver before entering the pool area, as well as posting signs reminding
citizens of the social distancing protocol.

Second, consider how you will adjust your sanitation policies to accommodate the
new pool policies. Will you reduce the amount of pool furniture available so that
it can be spaced approximately 6 feet apart? And will you clean and disinfect the
furniture between each time block, or periodically during each time block while
residents swim?

lifeguard at community pool sitting in white chair with red flotie in his lap Lastly, consider the staffing requirements you might have were these policies put into place. While the community might already have a staff of trained lifeguards, we do not suggest asking your lifeguards to perform multiple tasks in addition to watching the pool. This means you might consider hiring staff to document who enters the pool according to your time blocking chart, to collect the liability waivers, and who clean and disinfect all pool furniture and equipment.

If you find that you are able to withstand the pressure from residents to open the community pool, take a moment to consider what repairs can or should be made to your pool area before you do open it. The most common projects we at Classic have performed over the years include repairs to the wrought iron or other
fencing surrounding the pool, as well as surfacing and deck repairs.

Construction engineers discussion with architects at construction or building site

What you need to know about working with insurance companies

Catastrophe strikes at the most inopportune times. Dealing with insurance for repairs as a property owner of a multifamily property or HOA building can become tricky and confusing, making repairs after a storm a daunting task.

Interacting with insurance companies is inevitable and will be necessary to get the repairs started. To help aid through this journey, we have detailed a few things that you will need to know.

The owners will need to notify the insurance company

Construction engineers discussion with architects at construction or building site

The first step is to notify the insurance company that there’s been some damage to the property. Most policies will state a specific time frame for reporting damages and if your people fail to report them within this time frame, it might result in the denial of the claim.

Even if your residents have to leave the property for safety reasons, the owner or HOA Board president will still need to reach out to the insurance company within the specified amount of time.

Make sure your owner or Board member has many photos that clearly detail the damage, as well as comprehensive notes and remarks that they can provide the insurance company with. The insurance world is all about the little details so be very thorough.

The insurance company will likely want to send an adjuster from their own firm to handle that portion of the process, know that this person doesn’t always have the best interests of the owner or Board in mind.

In case you are unaware,  your people have the right to hire a public insurance adjuster. In the case that you decide to hire a public adjuster, make sure they are trustworthy and can help get the most from the insurance company.

Find out what your budget is going to be

The insurance adjuster will let your insurance agent know what needs to be repaired or replaced and how much it will cost. This is why it’s so important to look for an adjuster that has your property owner’s best interests at heart.

When you get this report, know that the adjuster is only going to repair or replace what was already on the property with comparable materials. If the owner or the homeowners of a HOA want any upgrades to the property, these will likely be coming out of their own pockets.

It will be your job to find a contractor

Not all contractors are equal. You might be tempted to go straight to your preferred vendor list when looking for someone to help you fix up the property, but that might be a mistake.

When it comes to insurance claims, you’ll need to look for a contractor company that is used to working with people in the insurance industry. Typically, these contractors are known as restoration contractors.

Restoration contractors have years of experience and the knowledge necessary to repair homes that have been damaged by fire, water, smoke or wind. In these situations, it is essential to keep in mind that there is a distinct difference between restoring a damaged home as opposed to remodeling or renovating an existing home. General contractors are not nearly as familiar with the insurance claim procedure.

Classic Construction & Restoration Inc. is one of North Texas’ most well-known restoration contractors. If you’d like more information on navigating an insurance claim or on restoration project, please give us a call today.

 

Sources:

https://www.adjustersinternational.com/newsroom/hiring-a-contractor-for-your-property-damage-insurance-claim-tips-for-home-and-business-owners

https://www.adjustersinternational.com/newsroom/how-to-file-a-homeowners-property-damage-insurance-claim

https://www.insurance.wa.gov/hiring-general-contractor-homeowner-insurance-claims

https://www.millerpublicadjusters.com/free-property-insurance-claim-advice-blog/insurance-company-contractor

https://www.builtrighthomesolutions.com/about-us/news-and-events/22281-whats-the-difference-restoration-vs-general-contractors.html