Property with Partial Ownership of Private Lake

[Indiana_Adam]

I have an insured who lives on a private lake. She, and the other properties surrounding the lake, are tenants in common. I'm reading through the HOA guidelines to find out who is liable in regards to the lake. It seems to me the Developer(HOA when he gives up control) is not liable for any law suits pertaining to the lake.

I'm writing her HO policy with $300,000 in personal liability. Should I suggest upping that to $500,000 or also writing her a 1 million umbrella? My bet is she will never tap into such high limits, but I don't want some *** to drown in the lake and then the survivors sue the whole group of lake owners. What do you veterans out there recommend?

 

[Guest]

ever heard of loss assessment coverage? Try that

 

[Indiana_Adam]

Actually, I have heard of loss assessment coverage. I thought loss assessment coverage only covered the insured if the HOA billed her for a portion of damage to commonly shared areas. It reads like the hoa has removed their liability in regard to the lake. So if someone drowns, its on the joint lake owners.

 

[Guest]

Your state definition will vary from mine, so I wont say much, but that could be something to ask your U/W and find out, that would be my first step

 

[Indiana_Adam]

Will do. Thank ya. Have you ever encountered that before? I didn't realize a group could just waive their liability by putting it into the HOA rules. The HOA mantains the lake. I don't know, I'm still super green though, so.

 

[Guest]

There could be a problem with coverage. The homeowner's policy provides coverage to the individual named insured. Since the private lake is owned differently, in other words, by a group of homeowners it is possible each individual's carrier will deny coverage due to conflicting ownership.

To avoid a coverage gap the HOA should purchase a commercial liability policy with the HOA as the named insured. There may be insurance requirements in the HOA's Covenants, Codes & Restrictions (CC&R's) or Bylaws. Problems arise if the HOA does not have a written requirement for insurance. The members of the HOA would not know who should purchase the insurance, if the insurance is cancelled or nonrenewed.

Also, the HOA may establish a board of directors. If so, the HOA should purchase Directors & Officers Liability.

 

[VolAgent]

Will do. Thank ya. Have you ever encountered that before? I didn't realize a group could just waive their liability by putting it into the HOA rules. The HOA mantains the lake. I don't know, I'm still super green though, so.

Stating that you aren't liable, doesn't necessary relieve you of liability. Something you and the HOA might want to consider.

 

[Jack_Merton]

Curious, and this may have been mentioned and I just missed it, but have you contacted the HOA to see if you can get additional information?