This morning, I spoke to the Destin, Florida, chapter of the Condominium Association Institute about properly reviewing and purchasing insurance coverage. Before speaking, I saw the prettiest white sugar sand beaches on the planet. Destin also has the clearest crystal blue water you can find along the northern Gulf of Mexico.

As I was viewing this beautiful scene, I kept thinking:

"What a difference a year has made in Destin Florida."

At this time last year, I was giving speeches about the BP Oil Spill. Many were freaking out because the oil could not be stopped. On television and the internet, there were dire predictions about "black gold" destroying those white beaches and clear crystal blue water. Tourism plummeted.

Today, concerns about oil on the beach seem to have vanished. Once again, hurricanes seem to be the area’s prominent threat. I offered a few practical tips everybody should follow when reviewing insurance coverage.

Prospective policyholders should ask and answer the following basic questions:

  1. Who is supposed to be insured?
  2. What types of property or activities are covered?
  3. What perils are covered?
  4. What is coverage provided?
  5. What are the limitations, if any, on the amounts of coverages?
  6. What conditions (especially exclusions) and other policy provisions may affect the coverage otherwise provided?

These basic questions should be thoroughly discussed with the insurance agent. The worst situation is to find out, after a loss occurs, that the loss is not covered.

I noted some often overlooked coverage considerations. Some insurers now offer an endorsement for "wind driven rain." Excess flood insurance coverage is often not purchased because many incorrectly think that flood coverage is only offered through the National Flood Insurance Program. Law and Ordinance coverage is also missed by many. Finally, given high percentage deductibles purchased by many condominiums for hurricanes, deductible buy-down coverage may be needed.

Click here if you wish to read the full paper that accompanied my speech this morning.