When timeshare resorts buy insurance coverage, the way they’re treated reminds me of the fable about the blind men and the elephant. The blind men each try to determine what the elephant is by feeling different body parts. The one who feels a leg says the elephant is like a pillar; the one who feels the tail says the elephant is like a rope; and so on. Their perceptions are correct, yet they’re missing important truths.
Some insurance agents perceive that a timeshare resort is like condominium, another may see it as a hotel. “Timeshare has long been a bit of a foster child to insurers,” says Desmond (Des) Armstrong, president and CEO of Armstrong Company Insurance Consultants. “It’s getting better today as more underwriters have become aware of how timeshare resorts operate and the coverages that are needed.” To illustrate his point, Armstrong relates the tale of a resort he called on that had a condominium policy. After reviewing the policy, he determined that the contents of the units weren’t covered, which could have been, well, a disaster if there had been an actual disaster.
To avoid such a situation, Armstrong recommends working with an agent who is familiar with the timeshare industry, and having an in-depth conversation that covers every facet of your operations. “Make sure they’re looking at all the coverages that you need, and don’t make cost the No. 1 consideration,” he says. “If a board is trying to save money, they may not realize what they’re not getting or may choose to go with less coverage. There’s no long-term advantage in going that route.”
Prepping for Renewal
For Scott McGuiness, vice president of commercial sales at Gregory & Appel Insurance, the conversation begins before he even visits a resort. “I get on the Internet and look at their website, activities and amenities,” he says. “I try to learn as much as I can about the property. I even visit TripAdvisor and read the reviews. The more you know, the more competitive you can be.”
He’ll then consult with the property manager, board members and/or property management company to review the ages of the buildings and the amenities. Finally, an on-site visit allows him to see first-hand how the property operates and if any changes are in order. “I can then make recommendations and determine their willingness to make changes,” McGuiness says.
For example, he might point out the need for depth markers alongside a pool.
To ensure you’re getting the best deal possible, begin the renewal process at least 90 to 120 days prior to your policy’s expiration date, advises Lorena Hatfield, marketing manager for K & K Insurance. “Putting together all needed information, such as a five-year database of claims information, payroll, sales numbers and financial reports,” she says. “This will allow your agent to provide you with an accurate quote.”
Armstrong also recommends that resorts be appraised every three years to insure there is enough coverage in place.
Now that you’re ready to talk, here are some items to consider:
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