HOA fee surcharges

That's a legal question and you should run that by your association attorney and perhaps your association insurance. That said, I'm not sure a person can be compelled to carry insurance (a mortgage company usually requires this as part of the mortgage agreement). It is a good idea - apparently, this person doesn't know or care that the association's policy typically protects the common areas and external building (a.k.a. skin) of the building, but not a homeowner's personal property or everything inside the house (in my community, utility lines from the point they enter the building are also homeowner responsibility). If this homeowner or his/her guests or household members did something that damaged the roof, siding or whatever the master insurance covers, he/she might be held liable for the repair bills (that's how our master policy works)

Perhaps a strongly worded letter by your attorney could persuade this person - I'd also keep that letter in the homeowner's individual file. This way if something does happen, the master insurance carrier knows you tried to collect proof and then it can decide what happens. In the meantime, sending homeowners an annual reminder to provide proof and perhaps a number their agent could call if he/she needs information on the master policy should be done. By obtaining information on the master policy, the individual insurance policy can be compared so there's no problem with under or over insurance coverage.

When the HOA pays for something it means ALL the HOA members/owners pay for it. So NO I would NOT want any of my HOA dues going toward 1 idiot owner who doesn't want to prove they have insurance. Which doesn't mean they don't have it just not showing it upon request.

Keep in mind that some HOA members often ASSUME the HOA insurance is their Homeowner's Insurance. It isn't. The HOA insurance is to cover common areas and liability of board members. Can't tell you how many times owners seem confused in thinking if something happens that the HOA insurance will pay.

Example: We had a situation where a tree fell on the next house over. The neighbor whom the tree was on did not carry insurance. The next door neighbor did have it. The HOA insurance only covered Common area. So the owner whom the tree fell on their homeowner's insurance covered the repairs. Their insurance then went after and sued the neighbor. The HOA insurance (if we had claimed) would have ONLY covered the expense of cleaning up the tree debris laying on the ground. Which is what I had us pay for was tree cleanup/removal.

So if someone decides NOT to carry insurance. It isn't the HOA's business. It's going to be that person's responsibility when things go badly...and they will...

Regardless George if the HOA pays it's still ALL the member's money. It still means that one owner owes ALL the owners the money. What if they don't pay the "surcharge"? How is the HOA legally going to be able to go after them? The HOA can only collect dues. This isn't a "dues".

And what if there is a slip-and-fall in the member's house but the amount of insurance which the HOA has arranged is insufficient to cover the accident? The victim then goes after the HOA member in whose house he fell. Can the HOA member then sue the HOA for providing insufficient insurance (while all along leading him to believe he had sufficient insurance)?

I think much argues against this.

Your HOA should institute a fine schedule and apply it to this member.

Jim,

Houses or condos?

You have much to learn.

There are HOA documents that require the HOA to maintain a list of owners with their HO-6 policy. I had to do that with a couple of HOA's where the HOA carried earthquake insurance. In order for the HOA to do that, every owner, per their CCRs was required to carry loss assessment insurance, to cover the special assessment to cover the high deductible.

Lenders are now requiring that owners carry a HO-6 policy in addition to the HOA master policy. Managing a townhome or condo is a far cry from single family detached home, where apparently, your expertise comes from.

If an HOA had to force the insurance, it is legal and it would be set up in the income column as HO Insurance policy and expense the same way. End result, zero income or expense.

I agree with Sheila and Augustin: run this by the association's attorney and insurer, and do not buy insurance for the homeowner. In the latter case there is the liability issue, and it's possible the HOA couldn't even buy this insurance -- there are laws forbidding the purchase of insurance on property that you don't own (because of the temptation to burn the place down). However, there may be specific requirements in Florida depending on the type of housing, which is why the OP needs the opinions of the pros.

that is correct, the surcharge would be a special assessment on the home/homeowner who did not carry insurance

Jim,

Same question ... perhaps I missed your answer.

Houses or condos?

Jim’s answer may be instructive - let’s wait for it.

Thanks, that makes a lot of sense. Our own insurance arrangement has always seemed a little strange to me. If it actually turned out that we were doing something against the state's insurance regulations then I would not have been surprised to find that out. On second thought, though, we're probably good. We've never had trouble getting an insurance agent to put together a coverage package for us and I think if there was any legal funny business they surely would have pointed it out by now.

Our insurance agent says that even the pros scratch their heads over this stuff. I think condo ownership is more complicated than single family ownership (even in an HOA). Typically though, the buildings' structure, foundations and roofs are considered common elements - and in my community all homeowners own an undivided interest in them, so it makes sense for the association to insure them.

Where it gets a little weird and confusing is with "all in" insurance where the association actually does insure parts of the interior, even though the individuals are responsible for maintaining them. My governing docs require the association to carry "all in" insurance, although not every condo association's CC&Rs do. When someone buys a home in my community, we have to provide them with a copy of the master policy so that the person's agent can write the HO6 policy properly and not have any gaps in coverage.

My town still uses some DOS based software. It still works fine. Not worth upgrading to do the same job. No reason to upgrade if it still works.

folks, the many responses are helpful and appreciated. prompted by these responses and the suggestions provided were have consulted with our insurance agents and our lawyer . simply put we will abandon this strategy and go to the stratgy of removing rights ,fining and eventually placing a lien .
we received much helpful advice........thank you folks