'How'm I doin?': a review & request.

When we began this monthly column back in January, our stated objective was two-fold: To address and hopefully clarify some of the traditional insurance coverage issues particularly relevant to residential real estate operations, and also to relate the information to the "real world" stresses of running properties in New York City in the 90's. Now, 10 months later, we'd like to pause and ask you, our readers, the classic New York City question: "How am I doing"?

As a recap, here are the major topics we've covered so far:

1. Commercial Liability Aggregates:

We examined the danger inherent in some of the newer liability policy formats which effectively put a cap on how much an insured can collect each policy year. Our recommendation was to approach your broker to see if your policy is of the new or old style, and if need be, have the broker correct the problem in several suggested ways.

2. Umbrella Coverage:

Reflecting on the dramatic increase in litigiousness in today's urban society and the escalation in frequency and severity of damage awards against property owners, we urged special attention to the adequacy of the pure dollar amount of your liability protection. For those of you still carrying only $1 million or $2 million of coverage, we pointed out that much higher limits are realistic available at some of the lowest rates in recent memory.

3. Co-Insurance:

In several articles we tackled the confusion that has always surrounded this poorly named and poorly understood but vital insurance provision. The bottom line recommendation remains unchanged: You must insure your property for an amount which represents no less than 80 percent of its true value, speaking of which...

4. Valuation:

Another tricky term that we tried to shed some light on with particular regard to the difference between actual cash value, which can mean substantial depreciation of the claim settlement, and replacement cost, which is intended to pay you for full current day repair or replacement expenses regardless regardless of the age or condition of your property.

5. Special Insurance Provisions:

We highlighted several "non-standard" coverages which must be specifically requested as they are not automatically included in most policies: * Water Damage Legal Liability -- Needed in New York City to protect in New York City to protect against claims by tenants resulting from pipe bursts or overflows * Building Ordinance Coverages:

Added protection against extra costs associated with such statutory requirements as having to demolish un-damaged portions of a building after a fire or rebuilding to more expensive modernized codes. * Extended Period of Indemnity:

For loss of rents insurance - continuing the rental income coverage for some period of time after repairs have been completed but before you've found a new tenant.

6. Financial Health of your Carrier:

In our last two articles we explored both the formal and informal sources of information available to the insurance buyer in determining the stability of an insurance company and the likelihood of their ability to honor their policyholders' claims now and in the future.

7. Insurance Costs:

Throughout all of the columns we frequently made the point that the insurance industry is in an extraordinarily "soft" pricing cycle. Many factors have led to a fiercely competitive atmosphere which persists. It's a good time to be a buyer, to fill in many important coverages, some available simply for the asking, and to increase limits if you've been running too "thin". An important caveat, however, is that many industry observers feel some carriers have been too aggressive, thus sacrificing long-term stability. Today you must examine the insurer as carefully as the insurance policy.

As we plant future columns we need some feedback: Are there other issues you'd like us to examine? Do some of the topics bear more detailed exploration? Did you brother-in-law just get a better deal than you have and you'd like to know why? Let us hear from you. Write to: Mike Zeldes Kaye Insurance Associates 42 East 42nd Street 4th Floor New York, New York 10168 or call (212)210--0804.

Thanks for the good things we've heard so far, and help us to continue to be a useful source of information.