Tag: Community Association Insurance
Community Association Cost-Cutting Tips | See also Financial Matters, Risk Management | Full list of Topics
Although in many parts of the country, planned community and condominium residents are battling snow and freezing temperatures, spring and summer—with warm weather and opportunities to get active—will be here soon enough. And some communities experience soaring heat year round, like those in association-prevalent states such as Florida. Many members invite guests into the community and host seasonal parties or activities in warm weather. You may even provide association-sponsored summer fun.
Q: The board of the association I manage is trying to reduce costs for operating the community. One way to do this would be to drop an insurance policy for specific risks, like flooding. What is the risk for the association of not providing this type of insurance?
Facts: An association maintained flood insurance for five of the buildings in its multi-building property. All five buildings were in flood zones as designated by the Federal Emergency Management Agency (FEMA). The association later decided not to renew the flood insurance policy, citing concerns regarding cost and the allocation of the expense among the other members of the association who lived in the non-flood exposed buildings.
Having the right kind of insurance and enough coverage under an insurance policy is key to operating an association. After all, insurance can protect the association from liability that might financially sink the community if costs for repairs, lawsuits, and accidents had to come out of pocket. But community association insurance is specialized. And not all insurance agents and brokers are really qualified to recommend insurance products, work with the association to determine its insurance needs, and keep up with changing insurance requirements as time goes on.
Summer is here and like many associations, yours might want to celebrate with and create goodwill among members. But before sponsoring an athletic event like a basketball game at your community, read your liability policy to see if athletic events are covered and speak to your insurance broker also. Why? Insurers often exclude injuries resulting from athletic events from an association’s liability coverage, which could leave the community open to liability for any injuries that occur during the game.
If you’re threatened with a lawsuit by a member who claims that her consumer protection rights under the federal Fair Debt Collections Practices Act (FDCPA) have been violated by you or your staff, your association's master policy carrier may consider settling the case rather than face the enormous burdens of time and costs required to defend a lawsuit—even if it’s frivolous.
Before sponsoring an athletic event like a basketball game at your community, read your liability policy to see if athletic events are covered and speak to your insurance broker also. Why? Insurers often exclude injuries resulting from athletic events from an association’s liability coverage, which could leave the community open to liability for any injuries that occur during the game. If athletic events aren’t covered, ask your broker if you can buy an “endorsement,” which adds the excluded risk to your coverage.
Q: The association I manage has a general liability insurance policy. Is this enough to protect the association board members from lawsuits, or should I consider additional insurance?
Facts: A Florida condominium community was damaged by a hurricane. However, its insurer's estimate of damages didn't exceed the deductible for the property, so the insurer made no payment to the association.