Self Insuring

Started by DennisS7 • 2 replies • 1452 views

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DennisS7 (Florida)
Posts: 32

Posted:

There is group within the Association who have been looking into and trying to push self insurance for the HOA in Florida. Is anyone self insuring or may have pursued this? Interested in knowing your opinion on this either way. Thank you.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Being self insured is another way of saying I have no insurance.

Being self insured means the Association pays for any and all damages from storms.

Being self insured means the Association pays for any and all thefts.

Being self insured means the Association pays for any liability out of it's own packet.

Being self insured means the Association pays for any legal actions brought against it.

Being self insured creates the huge potential of special assessments.

Being self insured will cause the property (if a condo) to not qualify for FHA loans (will hurt sales).

Being self insured may cause Realtors to direct clients away from sales in your development.

Being self insured may be against your governing documents and/or State law (need to check).

Being self insured will not protect any of your volunteer Directors from having to pay any legal bills if they are cited in a legal case for things they did or did not do while serving on the Board.

Being self insured, in my opinion, is not a good decision.

Tim

RobW (California)
Posts: 279

Posted:

All HOAs are self-insured to the extent that they pay the deductible out of their own pockets if there is a successful claim against their insurance policy. Increase the deductible, and you increase the amount you're self-insured, while decreasing the premiums. It's all about risk management and luck. Are these folks feeling particularly lucky? They might be better off pooling their personal finances and playing the Florida Lottery.

Rob

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