Liability Insurance

Right now my HOA has 1M/2M agg insurance. I want to increase it to 2M/3M agg for $1000/yr (total). The other board member feels making it higher invites more lawsuits.

What do others HOAs? Any feedback?

Our community property is the parking area, decks, and a pool

Eric,

That pool has the potential to ruin all of you. My first advice would be to fill it in and keep your coverage as is.

The liability problem with pools is that they attract kids. Kids are more likely to be at the pool and they are more likely to be injured. If Junior gets injured and a jury decides the association is at fault, the damages will depend on the severity of the injuries. A kid suffering brain damage, for example, may require round-the-clock medical care for the rest of his life. The jury will have to take a stab at what that will cost per year and how many years the kid is likely to live. Your current coverage is woefully inadequate for a worst-case situation,

I would strongly suggest that your board consult with its attorney to determine a reasonable amount of liability coverage. This is not a decision that a bunch of bone-headed homeowners should be making without knowing all the risks.

Eric M9 :

1 - Adding to good comments above, why not share simplified explanatory material - or invite your broker/insurer to explain 'bang for buck' and adequacy of underwriting to the Board members ? No property manager ?

Just how much financial risk do the other director(s) want to suck up if the corporation is under-insured ? As to asset damage , that includes how much deductible to be imposed on your corporation just to gamble on lowering your master policy deductibles.

An indirect factor may be whether your state legislation & CCRs preclude the master policy insurer from recovering ( compensation payouts ) by subrogation ( ie making good the loss & stepping into the role of the claimant ) a liability that you may happen to share with an individual owner or third party.

Subrogation may allow lower premiums at the risk of simply circularly re-targetting some of the payout loss within the community needing protection. Compulsory waivers of subrogation deny a master insurer the chance to chose simply to try slope-shouldering some of the larger loss back among individual owners or random blameworthy third parties.

2 - Would be interested to hear specific evidence form the other Director(s), that higher coverage invites more claims instead of an umbrella of defence.

3 - The comments about child victims are especially right on. "Attraction nuisances" may even simply be skylights or piles of unremoved snow. Young minors are not held to consent levels similar to adults even where parental neglect is obvious.

Well worth trying to get other Board members to listen to your broker/insurer or other HOA/condo organizations that have wrestled with these issues.

Good thinkin. As soon as the mothers learn how little insurance you have, they won't let their kids drown in your pool anymore.