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Tim O’Rourke on Challenges in Texas Condo Insurance

Tim O'Rourke on Challenges in Texas Condo Insurance
Photo Courtesy: Tim O'Rourke

By: Joshua Finley

The Texas condominium insurance market is facing some major challenges lately according to Tim O’Rourke, an insurance expert with decades of experience specializing in condominium associations. Recently, Tim outlined the key issues impacting Texas condo owners and the solutions his firm, Condo Insurance Pros, is implementing.

Insurance Carriers Exiting Major Texas Cities

One of the biggest trends Tim has noticed is that major insurance carriers are pulling out of the Texas condo market, especially in large metro areas. “We’re seeing standard or admitted carriers, as they’re called, pulling out of the market in writing condominiums in the Texas market,” Tim explained. “Originally that was a problem, only seen kind of along the coast. And now that problem has moved inland, so, areas such as Dallas and San Antonio are starting to suffer from what we would say is a lack of carrier appetite.”

This declining appetite from major carriers is being driven by claims and maintenance issues stemming from the unique ownership structure of condominiums. Unlike rental apartments with centralized management, condo owners individually control the maintenance and upkeep of their units. According to Tim, this decentralized approach can lead to problems from an underwriting perspective.

The result is costly claims related to aging systems and components that go unaddressed due to the inherent limitation of condo ownership structure. This has led carriers to believe condos represent a claims risk they are no longer willing to take on.

Extreme Weather Patterns Causing Claims

In addition to maintenance concerns, Tim said evolving weather patterns in Texas are furthering spooking insurance carriers. “Texas has experienced some pretty harsh freeze-thaw cycles and a lot of those buildings built in the 70s and 80s weren’t built to anticipate having freezing weather for three, four days. So, their pipes freeze and burst,” he said.

Wind and hail also pose significant problems in the state. As Tim explained, “Wind and hail is a large issue. There’s hail damage. Even in Texas, they’re getting hail and that puts a lot of damage on roofing.” Given that roof replacement costs can easily exceed $50,000 for a small condo building, the risk of massive hailstorm claims across dozens of buildings in a metro area is more than many carriers are willing to take on.

Niche Carriers Filling the Coverage Gap

To fill the gap left by existing carriers, Condo Insurance Pros has focused on bringing in niche insurance companies to write condo association policies. Tim explained that their market expertise and long-standing relationships enable them to partner with underwriters who might not typically operate in the Texas market.

“We have expertise throughout the country, we do a lot of business in Michigan and some of the Carolinas—bringing some of those carriers and kind of telling the story of Texas and why you should follow us down there,” Tim said. “We should be able to attract niche carriers in the Texas market because it is just such a giant market.”

Condo Insurance Pros leans on its industry experience to educate these niche carriers on the nuances of the Texas condo market. “It’s not just about saying, ‘That’s a building, let’s insure it.’ We dive deeper—what makes that building a good risk? What should we be cautious of when insuring it? Our history, experience, and in-depth knowledge guide these decisions.” Tim explained. This expertise-driven approach gives niche carriers the confidence to enter a new market with Condo Insurance Pros’ guidance.

Tim says this partnership approach provides value well beyond the initial policy transaction. “It’s much easier to retain a client than to constantly search for new ones. So, once we find them, we take great care of them. We want to have meaningful conversations about why choosing us benefits them long-term and how we’ll continue to support them in the future.” Their goal is to build relationships that last for the long haul rather than chasing quick sales.

To learn more about Tim O’Rourke and Condo Insurance Pro, check out his LinkedIn profile or visit his website.

 

Published By: Aize Perez

(Ambassador)

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