HOA Insurance

Corey,

I don't think that your $7500.00 or about $370.00 per unit annual premium number is high. My 1600 foot side by side Villa in Florida is over $1800.00 I realize that Florida is higher.

If it's a condo the owners actually own only from the walls inward (or some such language, see your documents).

The association insurance is for potential damage to the walls outward.

Corey,

No, that amount is not high. It includes the roof, outside structure (frame and outside finishes, windows?) plumbing in the walls, and so on. If you reduce it too much, you had better hope that you have a substantial Reserve Fund in case of a total destruction. aka, Joplin or it burns to the ground. Does that $3,500.000 include liability? What would it cost to replace the entire structure?

I am getting ready to do some shopping around, and that is when I came across that $3,500,000. It seemed high to me since that is more than the actual value of the building. When I start shopping around, I want to make sure I include the right coverage. How much coverage should I include? Maybe this is the right amount, but I just want to make sure it is.

Each unit is maybe worth $150,000. Although that includes the inside of the units, which is not covered by this insurance policy (unit owners have their own). So if I am doing this correctly it should at most cover $3,000,000 (150,000 * 20 units). But then I would think I should decrease this because I do not want to pay for insurance on the inside of the units (that would be double insurung the inside of each unit).

Should I keep it where it is, or does someone have a good formula to help?

Thanks

Corey,

Check your local HOA/CONDO laws. There may be required minimums that the Association must carry.
Don't expect the Insurance agents to know this (some might but some might not).

Tim

I do this every 3 years.

Your documentation like your CC&R's will tell you the minimum insurance you should have on the property. We have to have atleast a 1 Million dollar policy. Even our contractor's have to carry atleast a Million dollar insurance policy.

There are many factors involved in coverage. My house is insured for about 20K over what it is worth. Which is appropriate. Replacement costs and removal of the old property is a factor in value. It's good to be over insured than under.

The HOA has to carry additional coverage to also cover acts of their Board. They may have to have coverages for any Vehicles. Our HOA didn't own a vehicle. However, if a board member had an accident when doing HOA business, that policy picked up the difference between the individuals insurance and damages.

We recently had EF5 tornados hit our homes a few miles from here. FEMA has been making adjustments and claims. I would go to their website to find out what they cover to get a better idea of what insurances you should carry. Many here learned a valuable lesson about home insurance. Some of our carriers are even quiting the home insurance game and leaving many owners scavenging for new insurance companies. So you want to do a reputation investigation as well to see what company isn't going to leave ya.

There are few insurers that even insure HOA's. I know of only a small handful. Traveller's insurance is one of the few that I know of that still insures HOA's. You may check with them for shopping prices.

Corey,

Look for an independent agent in your area. They typically represent multiple companies.

Tim

Thanks for all the help. I was able to talk with an idependent agent and recieved a quote for $5,300 (current policy is $7,400) so great news.

Now another issue: I did make sure that I was quoted for the same coverage so it was an apples to apples comparison, but now I think it's important to make sure we have enough coverage for everyhting.

From previous responses it seems that $3,500,000 for building replacement cost is enough but what about other stuff?

business personnal property
medical expenses
personal injury
etc.

I am not looking for a number, but an idea of how I come up with the number. Yes, our decleartion states what the minimum coverage should be for some of these things, but it is over 40 years old, so I want to make sure I have enough, not just the minimum.

Thanks again for all the help.

Corey- I answered too quickly without reading your last post- sounds like you are asking the right questions.

I really would suggest you have your existing agent go through your coverage’s line by line and explain what each coverage does and how it benefits you. That would be free to you and most agents enjoy the opportunity to educate their clients. And don't forget to make sure you have what is called D&O liability. (Timely-this would actually cover you personally if you make an honest mistake and fail to get proper coverage)

Corey,,

MAKE SURE that any company that you go with has an agent near by. This is soooooooooo important.