Industry veteran outlines critical basics of the apartment, condominium and co-operative insurance market in the New York region
Jeff Schneider started working at Gotham Brokerage Co. Inc. in the early 1980s under the tutelage of his mom and dad. The company grew over the years but it never took on a big corporate feel, and that was by design. From the beginning the vision of Gotham was one of a friendly, family business with expertise about the New York City region.
“There are lots of places where you can buy insurance,” Jeff says. “One advantage to coming Gotham to buy your insurance is that you don’t have to deal with someone on the other end of an 800-number in a completely different area of the U.S. — or from another country.
“We’re a family-run business with deep roots in New York, so we understand the marketplace, as well as what it takes to stay on top of things in this city,” Jeff adds. “You don’t have to deal with call center employees who don’t know the difference between a condo and a co-op. We know which policies offer the best coverage in the wider New York City area, and we work with multiple insurers to deliver them to our customers.”
We asked Jeff to share his ideas about the apartment, condominium and co-operative insurance industry in general and Gotham Brokerage Co. Inc., specifically.
Tell us about your background and that of Gotham Brokerage Co. Inc.
I was going to be a lawyer — I completed law school and had taken a few summer jobs working in law. My dad suddenly needed some assistance in the office, and I came in to help him. That was in 1982, and I’m still here. My parents are retired now, and I’ve enjoyed keeping the family legacy going. I like working with people, and I enjoy having some autonomy over what I do. It feels great when you know you’ve helped a client avoid a situation that could really ruin or significantly alter their financial life.
We try to move with the market. Automobile insurance used to be a large component of that, but younger people moving into the area are not buying cars. It can cost you $500 a month just to park a car, so people use zipcars, rental cars or borrowed cars. The lessening demand for car insurance moved us in new directions. We looked at addressing other exposures and areas of potential loss. Sometimes we have to wait for the insurance companies to come up with the appropriate products, but it’s always our goal to be sensitive to customers’ needs and to make new coverages affordable.
Where are your areas of coverage?
We do a lot of business in Manhattan, Brooklyn, and Queens, but we also offer coverage in New York state, New Jersey, and Connecticut. We look at what products are available to us and what the public is looking for. We pick up about 800-900 clients a year, some of whom write a very small tenant policy for under $150 a year and some of whom have significant insurance needs.
How has the apartment-condo-co-op rental industry changed in recent years?
One of the biggest changes has to do with the perceived change in climate. Hurricanes and severe weather are a bigger factor than they used to be, and they are having a greater and greater impact on business.
Another change is that the industry as a whole started relying — for better or worse — on newly available data, such as credit scoring, to predict future losses. All insurance companies these days run credit scores. It’s not done to predict whether you can pay the premium, it’s used to predict future losses.
We understand that people go through difficult periods, such as divorce or illness. We always tell customers about these reports. We tell them that the best thing they can do is to try to pay their bills promptly to maintain a good credit score because it can affect the cost of their insurance. In the past it has been more for automobile than home-related coverages but increasingly it has an effect on your home insurance premiums.
How else do weather and climate affect renters insurance?
Insurance companies are concerned about the implications of climate change as it relates to property damage. Think about Superstorm Sandy, which was so incredibly destructive.
As a result of such extreme weather events, many companies have taken a look at coverage for their businesses — and their possible exposure — in a new light. They are considering the impact of events that never seemed likely in the past. Damage caused by storm flooding isn’t covered by a regular policy, but wind damage is.
Suppose a once-in-every-20-year storm comes through. They are asking questions like, “How much money could I lose?” or “What am I going to do about it?” To some extent, they are sharing the cost with their clients by having higher deductibles or rates. They’re also giving incentives that encourage customers to take steps to prevent losses. It could be strengthening their roofs and windows or making sure drainage systems are in place so water moves away from a building or so ice melts properly and quickly.
What is the most important thing you’d like people to know about apartment-condo-co-op insurance?
The most important thing is to let people know that coverage is available. It’s especially important to know if you live close to the water. While fire is relatively rare, there are more and more water claims. Policies also cover liability coverage for when your water damage also causes damage to another apartment. We hear from a lot of people who let their sinks or bathtubs overflow and wreck the apartment below them.
Insurance companies are becoming increasingly restrictive about apartments — even apartments on upper floors — if they are too close to the water. That’s one reason to get coverage now. It’s still widely available, and it’s not expensive. A basic replacement policy that will cover most of the contents of a smaller apartment — electronics, handbags, and more — you’ll pay $11 to $22 a month. There are limits on some items, including furs, jewelry, and silverware, but we can go over the fine points with you to make sure you’ve got adequate coverage.
What are some of the biggest misconceptions about apartment-condo-co-op insurance?
Most of our clients live in apartment or condos, and many assume that coverage is already in place.They think a landlord’s policy or a co-op or condo master policy will protect them. Unfortunately, that’s inaccurate virtually all of the time. The truth is they just don’t have insurance.
Renters insurance never enters many people’s minds until something happens. Recently, there was an explosion in the East Village that caused two buildings to collapse and ignited a large fire that spread to neighboring buildings. People start looking for coverage after something like that happens! They incorrectly assume that coverage is going to be very expensive and unaffordable, and that assumption can keep them from making a call about insurance. The fact is, basic coverage is very affordable, and it’s easy to get. You can get basic coverage for certainly less than $200 a year.
What’s one of the most important tips you can give apartment and condo dwellers?
It’s always useful to document your property. The documentation doesn’t have to be great, but you should have something. Policies usually don’t state anything about documentation, but our experience is that it’s a very good idea to have it. Even if you don’t have receipts or credit card statements for purchases, you can take 20-30 digital photos of your apartment. Be sure to store them in an e-mail account because they can be very useful if you have a claim. Having pictures is a good indication of ownership, and that is what insurance companies are looking for in the event of a claim.
Most companies are not looking to deny claims arbitrarily. Yet, if you claim you have a $25,000 wardrobe but can’t show a shred of documentation, that’s a problem. If you have a couple of American Express receipts, a couple of photos showing six suits hanging up and a dozen pairs of shoes, then you are on your way to getting your claim settled in a satisfactory way.
What are some of the biggest challenges you face owning this business?
One of the biggest challenges is trying to attract and retain our clients. We always want to be available to them in a way that’s convenient. We want to offer advice and service without ever being aggressive. We view ourselves as intermediaries between the insurance companies and the clients. We try to help our clients navigate their way. We let them know what some of their gaps in coverage are, and that they can take action on it if they wish.
The whole process of filing a claim can be stressful for some people. Do you help with that?
Most claims tend to go pretty well, but if there is a problem with a claim we run interference on the client’s behalf. The other thing that I would say is that we make the process fast and efficient. We don’t play games.
A lot of websites offer free quotes. You send in the information, but you don’t get the free quote. You get a request for more information, and then you get follow-ups from other products. We don’t do that. We will give you a quote, and it is accurate virtually all of the time.
We don’t leave you on the phone for 45 minutes. We try to simplify everything. So many things can be done through email. And we never turn email information over to another company that wants to solicit you for related or unrelated products.
We say we can get you covered in a New York minute, and we can. People call us all the time and say things like, “I’m at a closing, and we need coverage.” We will have it done with a proof of coverage email within 10-25 minutes. After a five-minute conversation, you can have proof of coverage emailed to you within the hour, and that’s virtually all of the time.
Learn more about Gotham Brokerage
If you’re not sure about an insurance issue, call one of the professionals at Gotham Brokerage Co. Inc. to make sure your most valuable assets are protected. We are a family-run business in New York City with more than 50 years of experience in helping clients find protection and peace of mind at an affordable price. Call us at 212-406-7300 or fill out the form at right.