Property

What Is Covered

The following coverage applies to those locations that place their Building, Contents and/or Loss of Income coverage through the Insurance Program:

 

  • Coverage is written on an “All Risk” form, which means that all damages are covered unless they are specifically excluded under the coverage form. 
  • Coverage is also written on a Replacement Cost basis, unless noted differently on your Insurance Overview.  The insurance company will not deduct for depreciation in the event of a loss.  Each location is obligated to insure the Building, Contents and Loss of Income and Extra Expense to the full replacement cost value. 
  • Coverage for flood and earth movement have higher deductibles and varied coverage limits. Please refer to your Insurance Overview for location-specific information 
  • Personal Property of resident House Directors is covered up to a limit of $15,000 per occurrence subject to a deductible of $500 per occurrence. This coverage applies to the employee while residing in the chapter house. This coverage is excess over any other collectable insurance coverage. If other coverage does exist, this coverage will reimburse the House Director for their deductible up to a maximum of $500 per occurrence. 
  • Personal property of resident members is not covered under this program.  The program does provide a homeowner’s policy deductible reimbursement of up to $500 per person with an annual aggregate limit of $50,000.  This coverage is intended to reimburse a parent's homeowners policy deductible or a tenant’s policy deductible for a loss that occurs at the chapter house.  For theft claims, there must be a total loss of $2,500 before this extension will apply.
  • If covered property is damaged by an insured peril and the property cannot be occupied as normally intended, this coverage can respond as follows: 
    • Covers the Loss of Rental Income during the period of repair or rebuilding, up to 24-month. Coverage can continue for a period of nine months after the date the property is repaired or rebuilt if the timing of the loss causes residents to commit to other housing contracts for the entire school year
    • Covers Extra Expenses that are incurred to continue normal operations

The perils of mechanical breakdown, electrical injury, and steam explosion of boilers or pressurized vessels are not covered under the property policy.  Therefore, in order to insure your property for these perils, you need to purchase the Electrical Breakdown coverage.  For those locations that purchase this coverage, the policy provides direct damage, loss of income, extra expense and a separate limit for consequential damage (food spoilage).

 

Vacancy Clause

Insurance companies are generally very concerned about providing property insurance coverage for buildings that are vacant.  These buildings are at a greater risk of claims due to no one living on the property, especially claims such as water damage from broken pipes, vandalism, theft, and sprinkler leakage.  This concern has been heightened during the current economic period where there are clearly many building that are vacant or partially vacant.


The underwriter for the MJ Sorority book of business understands the sorority exposure of the chapter houses being closed for the summer break and the other academic year breaks, so this issue of vacancy does not apply.  The insurance policy is intact as long as the summer break does not extend beyond the 120 day mark.  If indeed your university’s academic break is in excess of the 120 days allowance, please contact your MJ Account Executive to discuss.

 

The impact upon our Sorority clients may include the following examples:

  • A chapter is closed and there are no future occupancy plans for the building
  • A chapter is closed and the future occupancy plans exceed the 120-day window provided for in the insurance coverage
  • A new colony/chapter is planned for a particular university and a building is purchased with the plans to have it remodeled and ready for occuoancy in the next school year/semester term

In these scenarios, the property coverage remains intact; however, the property deductible for all the coverages is $10,000 per occurrence as opposed to your normal property deductible.

 

There is a risk management tool that can be used to keep your property deductible at the normal level: the employment of a property caretaker who lives on the property would reverse the insurance company’s vacancy deductible provision.  If this is being considered, it would be prudent for you to contact us so we can discuss and show in our records to ensure no controversy if a property loss would occur.

 

Property Insurance: Trends

 

Remodeling projects

 

If you are planning a remodeling project, please contact us to discuss any coverage implications. We also recommend that you review the Reviewing Contracts resource, which discusses working with contractors.

 

Property claims analysis

 

For property claim trends and analysis, please refer to the Insurance & Risk Management Summary.

 

Automatic sprinkler systems

 

MJ Sorority clients take life-safety very seriously, as evidenced by the number of properties in the insurance program that are sprinklered, the most effective life safety measure in any property. As of January 2014, 66 percent of our clients’ buildings are sprinklered; we expect that number to rise to at least 73 percent by the beginning of 2015 due to our clients’ sprinkler mandates due dates and other concerned property owners who are budgeting for this risk management tool.

 

Property maintenance

 

With aging properties, maintenance is an ongoing issue. We encourage our clients’ House Corporations to review the Preventive Maintenance Guide created by CSL Management, as well as numerous other resources available on our website.