The condominium association made a decision to change management because they had a feeling something wasn’t quite right—and little did they know just how not right things were.
They had done everything by the book. Their board paid their bills on time, consulted professionals, and made careful decisions to protect their community. Yet, as RISE Association Management Group began its meticulous transition process, we uncovered a shocking truth: this $85 million high-rise had no insurance coverage.
The Discovery: A Routine Check with a Shocking Outcome
As part of our thorough onboarding and transition audit, we routinely verify key financials, vendor contracts, and—critically—insurance policies. While reviewing records, we reached out directly to the insurance carrier to confirm coverage. What we found was unthinkable:
The association’s insurance policy had been canceled.
This revelation came just one day before a forecasted hard freeze, a situation that could have resulted in catastrophic financial losses had any damage occurred. Even more alarming? The insurance agent had just assured us that the policy was in full force and even issued a certificate of insurance reflecting as much.
How Could This Happen?
The board had paid their premiums on time. Payment records showed all installments made directly to the insurance agent. From their perspective, they had done everything right. But our investigation revealed a dangerous breakdown:
- The association had bound coverage and paid in full to the agent, as required.
- The agent typically forwarded payments to the carrier—except once.
- That single missed payment triggered a cancellation notice.
- The management company had recently changed addresses—but never updated the insurance carrier.
- The cancellation notice was sent to a vacant building.
- The carrier also sent a notice to the agent, but the agent never forwarded it to the association or the management company.
- Months passed without anyone realizing the policy was void.
The Blame Game: When No One Owns the Mistake
You might assume that once the issue was discovered, the insurance agent or the previous management company would step up, take responsibility, and resolve the matter.
You’d be wrong.
Instead, both parties shifted blame to the association.
- The agent argued that the association should have sent payments directly to the carrier, despite industry norms allowing payments through an agent.
- The management company blamed the agent for failing to update the address.
- Meanwhile, the agent blamed the management company for not requesting an address change.
- To make matters worse, the Agent delayed providing documentation which would have made securing alternate coverage possible.
No one wanted to own the mistake. No one wanted to take action. And the association was left exposed, uninsured, and in serious jeopardy days before a hard freeze. The insurance company, whose risk appetite had changed, was contented as they no longer wished to write condominium association business and thus had no interest in being flexible. Meanwhile the insurance agent had already given up on reinstating coverage and tried to then sell a new policy which would cost around $80,000 more than the cancelled policy for reduced coverage.
The RISE Solution: Fighting for Our Client
At RISE, we don’t just manage properties—we protect them. Armed with deep expertise in insurance, risk management, and regulatory compliance, we immediately took action:
- Filed a formal complaint with the Texas Department of Insurance.
- Made the legal argument that payment to the agent equaled payment to the carrier, as the agent was acting on behalf of the insurer.
- Presented the case that the cancellation notice was invalid due to misaddressed communication.
- Applied pressure on all involved parties, making it clear that this negligence could have led to an irreparable financial disaster.
After weeks of back-and-forth, our persistence paid off—the insurance carrier ultimately agreed to reinstate the policy.
Crisis averted.
The Takeaway: Protecting Your High-Rise Starts with Due Diligence
This story serves as a critical wake-up call for high-rise condominium associations everywhere.
✔ Many other high-rise associations may be in the same position—especially if their management company has changed addresses without updating crucial records. ✔ You cannot assume your insurance agent or management company will do the right thing. Even when negligence is clear, parties will often deflect blame. ✔ RISE’s expert-led transition process ensures nothing slips through the cracks. Our proactive approach prevented what could have been an $85M catastrophe. ✔ Expertise in insurance matters. Without our knowledge of insurance regulations and our aggressive advocacy, this story could have ended very differently.
Are You Sure Your Association is Fully Covered?
Most associations trust their policies are intact—until a crisis proves otherwise. Don’t wait until it’s too late.
At RISE, we uncover hidden risks, correct critical oversights, and protect your community. If you want a management team that knows what to look for and how to fight for you, let’s talk.
📞 Call us at 281-942-8488 or 📧 email [email protected] to ensure your high-rise is truly protected.
