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| IHG Insurance (National Insurance Provider) |
| Providing Community Association Insurance for over 25 years: D&O Liability, Crime Products, Umbrella Coverage and Property Manager's Errors & Omissions Liability. |
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CS
(California)
Posts:2
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| 08/22/2006 5:27 AM |
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| Recently discussed at an assoiciation meeting-was the idea of asking our individual Homeowner Insurance Companies to contribute to our depleting Reserves in the tune of $3000. We're in CA, our community has really gone down and our reserves some how vanished? One homeowner commented that she had called her insurance and that they would in fact cover the assessment. Another said her insurance co. said the reserves would have to be completely deminished. Is this legit? And what about the homeowners' insurance co.'s that won't cover, could the homeowner be liable? Could you give me more information on this idea of having the Homeowner's Insurance Co. contributing to HOA Reserves. Thanks. |
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hoatalk
Posts:490
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| 08/22/2006 5:32 AM |
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| This will vary for each homeowner and their insurance policy. They will all have various terms and deductables. The bottom line: If the HOA makes an assessment then each member is liable to pay, regardless of what their insurance covers. |
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JosephW
(Michigan)
Posts:787
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| 08/22/2006 10:07 AM |
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Insurance companies don't contribute to reserve accounts for associations. I think what they were talking about is called "loss assessment coverage". This coverage is available to individual owners (not the association). If the association has a loss, that is partially covered by the association's insurance (repairs exceed insurance limit), and an assessment is passed to make up the shortfall, "Loss assessment coverage" will pick up the owner's (if they've elected to add that endorsement) share of the assessment, up to the limit of the coverage.
Joe |
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CS
(California)
Posts:2
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| 08/22/2006 11:44 PM |
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Thanks HOAtalk and Joe, very logical. So, because they had an assessment last year (according to the amount allowed by the CC&Rs) could a "Loss assessment coverage" claim be filed for a past assessment? Or is there a time frame that restricts the last idea and only applies to "new" or "future" assessments? I will as well check the policy. Wow, you guys are good. BTW, our current reserves are 2% funded.
Thanks again. |
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JosephW
(Michigan)
Posts:787
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| 08/23/2006 6:55 AM |
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It would depend on the wording in the individual owner's policy, but as a rule, "loss assessment" coverage only kicks in if there is an assessment specifically earmarked to make up for a shortfall in insurance coverage, not just a budget shortfall. For example, if the association submitted a claim where the damage total was $150,000, but the insurance only covered $100,000, and the association assessed the owners for the $50,000 balance, then those owners who had "loss assessment" coverage could submit a claim for their share of that assessment, up to the limits of their personal coverage.
I really don't know if there's a time limit, you would have to talk to your individual agent.
Joe |
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Joseph West
Official HOATalk.com Sponsor
Community Associations Network, LLC
www.CommunityAssociations.net
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