Tag: Insurance

A Clarification on Homeowners Insurance

Posted on by Don Ryan

We have had several questions recently about  “Master Policy”, something that apparently Condominiums carry, wherein they insure the structures and the homeowner/tenant insures the contents.  I have had several insurance agents argue this point as they believe this is a Condo association, which it is definitely not. We are a Subdivision HOA.

One homeowner said that it looked like the Declaration (C&R) eluded to a Master Policy in this paragraph:

5.1 Association Insurance. The Association shall have the authority to and shall obtain or cause to be obtained insurance for all insurable improvements which the Association is obligated to maintain, whether or not located on the Common Property. This insurance shall provide, at a minimum, fire and extended coverage, including vandalism and malicious mischief, and shall be in an amount sufficient to cover the full replacement cost of any repair or reconstruction in the event of damage or destruction from any such hazard. Alternatively, the Board may purchase “all-risk” coverage in like amounts.

At first glance, this seems to say that any “improvement” the Association is “obligated to maintain” might just include the individual townhouses. It does use phraseology that might make one think so, but this is not the case. Farther down the Declaration a bit this point is clarified:

5.2 Individual Insurance. By virtue of taking title to a Lot, each Owner acknowledges that the Association has no obligation to provide any insurance for any portion of any Lot, and each Owner covenants and agrees with all other Owners and with the Association that each Owner shall carry property insurance on his Lot and all structures constructed thereon and a liability policy covering damage or injury occurring on the Lot.

I do hope that anyone who has not provided proper proof of insurance does so soon.

Homeowners Insurance, Information

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Mandatory Homeowners Insurance

Posted on by Don Ryan

We still do not have proof of cost-to-replace insurance (Renters or Condo insurance is not sufficient) on a number of properties, despite having sent several notices and warning letters.

We will continue to impose fines (which are classified as Assessments) on those homeowners who either cannot or will not provide the required proof they have the mandatory coverage specified in our Declaration. As a reminder, all assessment fines left unpaid are added to member accounts and will result in an Assessment Lien on your property.

While we are reluctant to place significant fines against homeowners, they must understand that as homeowners in this HOA, they must have proper home insurance and demonstrate that they do. Fines can be assessed at $250 per week and $1000 per month for any violation of our Declaration (see Fines and Enforcement Policy).

Homeowners Insurance

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Required “Cost to Replace” Homeowners Insurance

Posted on by Don Ryan

As most of our homeowners are now aware, the HOA’s Declaration (CC&R) requires proof that you have a “cost to replace” policy on your home. This level of insurance has been a requirement of our Declaration since this subdivision came into being in 1970 or 1971.  To date, about 75% of our 416 homeowners have responded and provided the documents requested.  We did sent out Warning letters on January 2nd to those who have not provided requisite documentation and giving them 15 days within which to provide it. Last week, we started sending out certified letters to some of these individuals indicating they will be fined, per our Fines and Enforcement Policy, for not providing this information as required by our Declaration. Some throw out these Warning notices, which does not change the fact that they were sent out.

Just to be clear, Renters Insurance and Condominium Insurance does not meet the requirements.  Actual cash value insurance is also inadequate. Homeowners must have full replacement coverage for the dwelling itself.

We will be sending out another group of certified Fine letters to the those homeowners who have still not provided the documents which have been requested more than 3 times.

 

 

Homeowners Insurance, Information

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Homeowners Insurance Policies

Posted on by Don Ryan

Our Declaration of Covenants, Conditions and Restrictions requires that we have current and accurate copies of each owners insurance policy, as stated below (in part):

5.2 Individual Insurance. By virtue of taking title to a Lot, each Owner acknowledges that the Association has no obligation to provide any insurance for any portion of any Lot, and each Owner covenants and agrees with all other Owners and with the Association that each Owner shall carry property insurance on his Lot and all structures constructed thereon and a liability policy covering damage or injury occurring on the Lot. The property insurance shall cover loss or damage by fire and other hazards commonly insured under an “all-risk” policy, if reasonably available, including vandalism and malicious mischief, and shall be in an amount sufficient to cover the full replacement cost of any repair or reconstruction in the event of damage or destruction from any such hazard.

The Association shall have the right, but not the obligation, at the expense of the Owner, to acquire the insurance required to be maintained by the Owner if the Owner fails to provide a valid policy to the Association with a prepaid receipt within ten (10) days after receipt by the Owner of a written request from the Association. If the Association does acquire insurance on behalf of any Owner, the cost thereof shall be assessed against the Owner and the Lot as a specific assessment pursuant to Section 6.5.

We will be sending out another Owner Information request next month (one was sent last year with minimal responses).  I hope that this time, everyone responds within the 10 days mentioned above.  Any owner who does not provide proof of insurance will be subject to the Association acquiring insurance on your behalf and at your expense.

Please provide the Office with proof of homeowners insurance so we do not have to resort to the alternative.

Information, News

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