Anyone Know About Homeowners Association Insurance?

[Guest]

I am health life, recently got my P&C license so I know enough to know I don't know a lot. Have a few questions about homeowners associations. Belong to one, don't really have a choice as it is a small neighborhood. My question is: is neglect and/or inaction by a board a potential cancellation by the insurance company? We have real issues with our pool, lake and tennis courts where I live. There is money in the coffers to fix certain items, but the board has chosen to sit on a bunch of cash for a "rainy day" and because the economy sux and they don't want to spend any money right now. I have requested a copy of the policy so I can read it. They have said they would send it to me to review, but right after I requested it they padlocked the tennis courts until further notice. We were supposed to have a team playing out of here, with visiting neighborhoods starting in Sept. Guess that's off. Which imho is a good idea since it is an accident waiting to happen with large cracks and surface coming up everywhere. Looks real nice for potential buyers (NOT), but that's another issue.

The way I see it, it should work in much the same way a homeowners policy would. If you get coverage, and your property is in good shape when the policy is taken out, there is still a duty by the homeowner to maintain that property in a reasonable manner so as not to cause a potential hazard. I would think it would work in the same way with a homeowners association policy as well. I don't want to be involved in any lawsuits. Didn't think to find out when I moved here a few years ago. Geez health life is much less complicated! Thanks in advance for any responses.

 

[NCAgent]

Geez health life is much less complicated! Thanks in advance for any responses.

That's part of why E&O is 3-400 bucks rather than 3-4k.

 

[briko3]

Here's my advice:

If it's a small neighborhood and you're part of the association, you're liable if they get sued and lose and there isn't enough insurance to go around. So....get an umbrella policy to protect yourself or drop out of the association.

As far as the question you actually asked, I have no idea....but I doubt they can drop. (Again, that's just a guess)

 

[jhuang]

Small HOA board are walking a thin line if there are major deficiencies and if no insurance policy to back them up, they can get sued directly.

Insurance of the HOA should not be penny pinched, neither should maintenance. If the owners aren't paying their fair share, have them place a lien on the unit and collect via foreclosure. Taxes and HOA liens have first priority over mortgages.

If they are clueless, they need to spend money on legal representation or professional management instead of penny pinching maintenance.

 

[Guest]

The board members will personally be on the hook if anything happens. thats what D&O insurance is for.

As someone stated, get yourself an umbrella policy and also, on your homeowners insurance you can usually add the "loss assessment" coverage, that might help CYA also.

Dont depend on someone else in this situation, protect yourself

 

[Guest]

The board members will personally be on the hook if anything happens. thats what D&O insurance is for.

As someone stated, get yourself an umbrella policy and also, on your homeowners insurance you can usually add the "loss assessment" coverage, that might help CYA also.

Dont depend on someone else in this situation, protect yourself

Thanks to everyone who has responded, besides giving me peace of mind on my own $$ (and stuff), it's helping me learn. I'm good I think with my own coverages. Have homeowners/auto, umbrella at $1 million, plus professional liability insurance for my home office (all with the same insurer, except for the prof liability, but it's listed). It is all with the same agent, who I trust and refer health clients to. I need to check into the loss assessment coverage with them though.

As for the board and the association, I think they (and we) are covered as well as defined in a D&O, except I worry about the "inaction" part. We have some issues with the lake and some overgrowing trees that are encroaching into one of the neighbor's yard (she says it is threatening her foundation from the trees in the common area behind her house). She is a widow who lives by herself, and has asked them ever since we moved here (so 4 years at least) to please address this, and maybe even before that. So far, nothing. She even asked us to help her by speaking up on her behalf, again, to no avail. The other issue is the pool, it's too easy for a drunk teenager to sneak in there at night, but either jumping the fence, or just typing in the code to the security gate if they happen to know what the code is. Believe me that happens every summer. It's expensive to put in a security system or a card key system so anyone can get in any time, including those who don't pay their dues, argh!!
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Small HOA board are walking a thin line if there are major deficiencies and if no insurance policy to back them up, they can get sued directly.

Insurance of the HOA should not be penny pinched, neither should maintenance. If the owners aren't paying their fair share, have them place a lien on the unit and collect via foreclosure. Taxes and HOA liens have first priority over mortgages.

If they are clueless, they need to spend money on legal representation or professional management instead of penny pinching maintenance.

I have requested a copy of the coverage. We'll see how long they take to give it to me. I think I have become a burr in their side. They'll thank me later if something happens.