2021 Assessment Rate Announcement
The challenges we faced in 2020 were extraordinary. Our businesses, our neighbors, and our nation struggled to navigate a global pandemic and the financial and personal fallout that came with it. The uncertainty of our safety and wellbeing encompassed every facet of our lives, leaving us worrying about the days ahead. I want to reassure you that despite this turmoil, through sound management, The Society effectively navigated this difficult time and feel we are well-positioned to continue to do so in 2021.
In determining the rates for 2021, the Board of Directors carefully considered the following:
- Operating Costs – COVID-19 presented the additional challenge of keeping the offices open while protecting our employees. Periodic deep cleaning and disinfecting were enacted, and strict distancing and gathering policies were put in place. Overall operating expenses, such as payroll, employee benefits, utilities, postage, printing, office supplies, and building maintenance remained steady.
- Residential Construction Cost Indexes – With so many Virginians working from home and needing to update or improve their living spaces, the home improvement industry has seen a sharp increase in activity. Unspent vacation money has gone into renovations and upgrades. As a result, the supply of home building materials has dwindled and their cost increased. We anticipate that this will hold true for much of 2021.
- Society Financials – While 2020 had a record number of storms, most, fortunately for us, targeted the Gulf Coast. However, losses resulting from Hurricane Isaias and other significant weather events in Virginia dampened our overall performance. We were able to offset these weather-related losses and a considerable decline in the stock market due to the pandemic by maintaining a healthy equity investment allocation. This has resulted in solid year-to-date investment performance, as the stock market has shown remarkable resilience and solidified our financial position.
As a result, the Board has voted to hold the 2021 Base Annual Assessment rate at 22%. An additional assessment of 22% applies to secondary residences, and an additional assessment of 10% applies to coastal properties located in designated territories. These assessment rates are expressed as a percentage of your premium listed on the declarations page of your policy.
The minimum annual assessment per homeowner policy will now be $250. Assessments for optional products such as Equipment Breakdown Coverage are charged in addition to the $250 minimum annual assessment.
Please take some time to review the limits of liability and coverage shown on the declarations page to make sure you are comfortable that your policy’s coverage amount is adequate to restore your property fully following a significant loss. We are always happy to review your coverage with you and conduct a reinspection if needed. Feel free to contact your underwriter or agent to request a review.
For 2021, we continue to ask our members to consider going paperless with the Society correspondence. Going paperless saves the cost of printing, handling, and postage. It also contributes to the preservation of our natural resources and the protection of our environment. All members have the right to obtain a paper copy of policy forms and endorsements upon request and without charge.