DavidA7 (California)
Posts: 179
Posts: 179
Posted:
Hello all,
our Association replaced its Allstate policy with a new Farmer's policy for a lower price with more coverage. The more coverage includes a walls-in coverage. So now the HOA is covering internal attached to property items. Our agent says its like if we turn the property upside down anything that stays attached is covered for example flooring, kitchens, cabinets etc.... Now here is the fun part I found that our CC&R's are very ambiquous on the subject of insurance coverage and when our Insurance agent read it he wrote back that he agrees. Here is his statement:
"It appears that way. However, during a loss, it all depends how the adjustors handling the claim or attorneys involved interpret what the CC&Rs state.
As I had stated before, your CC&Rs appear to be vague when it comes to this matter.
The HOA can have Walls-out coverage but may be liable if an attorney for a claimant finds that the CC&Rs are interpreted in such a way where the interior units should have coverage."
Additionally, we informed the membership of the change to walls-in coverage but to consult with their own insurance company first before making any changes and the HOA was not advocating any changes to personal interior insurance.
Now having said all that I have advised my fellow Board Members that I wish to bring up and get approved at our next board meeting a process to modify our CC&R's, naturally following all the legal requirements. I informed them that since we all voted in the new insurance coverage with Walls-in coverage it is now our fiduciary responsibility to protect the HOA from lawsuit because of the ambiquity of the CC&R's by modifying our CC&R's to reflect this new coverage or to at least clarify them so as to allow future boards to add/remove such coverage.
I have a feeling my fellow Board Members are going to turn this down as its costly to modify CC&R's and we are somewhat short of money. What other recourse do I have to protect fellow members as well as myself if we have a claim so that the CC&R's match our insurance coverage? I was thinking that if other Board Members turn the vote down that we record who approved/denied and that I indicated it was our fiduciary responsiblity to clarify the CC&R's? Other?
Thanks,
our Association replaced its Allstate policy with a new Farmer's policy for a lower price with more coverage. The more coverage includes a walls-in coverage. So now the HOA is covering internal attached to property items. Our agent says its like if we turn the property upside down anything that stays attached is covered for example flooring, kitchens, cabinets etc.... Now here is the fun part I found that our CC&R's are very ambiquous on the subject of insurance coverage and when our Insurance agent read it he wrote back that he agrees. Here is his statement:
"It appears that way. However, during a loss, it all depends how the adjustors handling the claim or attorneys involved interpret what the CC&Rs state.
As I had stated before, your CC&Rs appear to be vague when it comes to this matter.
The HOA can have Walls-out coverage but may be liable if an attorney for a claimant finds that the CC&Rs are interpreted in such a way where the interior units should have coverage."
Additionally, we informed the membership of the change to walls-in coverage but to consult with their own insurance company first before making any changes and the HOA was not advocating any changes to personal interior insurance.
Now having said all that I have advised my fellow Board Members that I wish to bring up and get approved at our next board meeting a process to modify our CC&R's, naturally following all the legal requirements. I informed them that since we all voted in the new insurance coverage with Walls-in coverage it is now our fiduciary responsibility to protect the HOA from lawsuit because of the ambiquity of the CC&R's by modifying our CC&R's to reflect this new coverage or to at least clarify them so as to allow future boards to add/remove such coverage.
I have a feeling my fellow Board Members are going to turn this down as its costly to modify CC&R's and we are somewhat short of money. What other recourse do I have to protect fellow members as well as myself if we have a claim so that the CC&R's match our insurance coverage? I was thinking that if other Board Members turn the vote down that we record who approved/denied and that I indicated it was our fiduciary responsiblity to clarify the CC&R's? Other?
Thanks,