Insurance Coverage for Retention Pond Malfunction and Repair

Started by PegM1 • 7 replies • 1422 views

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PegM1 (Pennsylvania)
Posts: 26

Posted:

Our HOA is responsible for the maintenance of retention ponds which are considered common elements. Is there "special" insurance that should be purchased to cover the pond repair for sinkholes that develop or a malfunction of the retention pond that requires it to be rebuilt?

Thank you!

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

How about calling your insurance company?

PegM1 (Pennsylvania)
Posts: 26

Posted:

Would love to communicate with the insurance company. The HOA Board has instructed the insurance company to only communicate with Board members. I have requested the Declaration pages of our policies but have been told they are "not available." And, I know that as a homeowner I am permitted to see the policy info; but they keep stonewalling.

I was simply hoping someone may have some insight as opposed to a snarky response.

GeorgeS21 (Florida)
Posts: 3,808

Posted:

Peg,

I don’t think it started out snarky - your initial post didn’t provide much information - your second post provided a bit more.p

MelissaP1 (Alabama)
Posts: 13,836

Posted:

I would assume your "insurance" is going to be in the form of a "special assessment" for ALL the owners to cover the cost. Not sure there is an insurance for retention pond malfunctions. If there is, there still is an expense involved in making a claim. Which could be in thousands of dollars.

Former HOA President

NpS (Pennsylvania)
Posts: 4,216

Posted:

In general, things that are likely to fail or wear out over time have some form or warranty. The cost of those warranties are typically part of the purchase price. Those warranties have all kinds of limitations that require proper use, installation, maintenance, etc.

I have never heard of any insurance policy on a retention system.

In your shoes, I would look to see how your retention system is dealt with in the reserve study.

Sikubali jukumu. Read all posts at your own risk.

KellyM3 (North Carolina)
Posts: 2,239

Posted:

Hi Peg,

A retention pond failure is such a rare event that I'm unsure how the HOA could really budget for it (it's a pond) outside of dredging/sediment removal...as such, I'm not sure how insurance companies would cover it other than as part of your liability insurance coverage in case someone falls in, gets hurt, etc.....

In all seriousness - and if your HOA really wants structural protection for the pond - inquire w/ Lloyds of London if your local insurer can't serve you.

CathyA3 (Ohio)
Posts: 6,299

Posted:

Ex-board member here.

I believe that something like a sink hole would be considered an "Act of God", and insurance companies don't insure against such things. An Act of God is an accident or event resulting from natural causes, without human intervention or agency, and one that could not have been prevented by reasonable foresight or care.

So it all depends on the nature of the "malfunction." If it results from natural processes that you're unable to control or prevent, then I doubt you could find any insurance to cover it. If the malfunction resulted from human error or negligence, that may be different, but it's a question that you need to ask an insurance agent.

The only insurance I'm fairly certain the association would have is liability insurance (in case someone is injured or drowns in the pond) but that's a different set of risks.

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