HOA insurance problem

I am in a condomimium building. The insurance for building doubled in the past year. We weren't given any explanation. So some of us got a quote / proposal from another company. We showed it to the board. They will not accept it . They say that this other insurance company hasn't s3n the loss report for the building. So I talked to the other insurance who gave the quote and they said for the insurance to go up that much , there could be losses that are high in cost. It was advised for us to request from the board, the loss report they refer to. I requested the report saying since the other insurance company has not seen the loss report , they would like to see it and decide if there quote would be correct. I have not heard back from the board and it's been 2 weeks. Do I have the right to get this information from the board? That is my question 😒

I would say yes you are entitled to see this report. Send a letter in writing to the board and request this information. send the request in writing send it via USPS certified mail with return receipt. Have you discussed this with other owners? What do they say? Find out when the next board meeting is when this new insurance policy is voted on and or ratified into the budget. If enough people show up, may be abel to stop it and get your HOA to change carriers or stay with the same carrie and show cause for not raising the premiums.

I will agree with everything Bill has pointed out. In California, we have seen steady increases over the last three years. For those that want earthquake coverage, that have almost doubled in 5 years. Guess everyone is waiting for the "Big One", and then get out of Dodge.

The report you are inquiring about is a Loss Run report. It probably is not going to be part of what can be inspected, primarily many may be of a legal nature, such as an insurance company representing the HOA in a legal matter involving damage or maybe a suit against the Board/Association, or the Association maybe going after a homeowner or maybe a vendor.

How comparable was the quote you got versus the one the board already had, that doubled? I am guessing you might be self-managed. How involved is the board? Think they might take the new price and then raise dues to offset the increase. How much work do they put in. What have the increases been over a five-year period?

Think about this also, if self-managed, and you take them to court, you know who will represent them, the insurance company and the rates will escalate again.

What documents did your group give to the quoting company?

I have to question their integrity.

As a management company, I send out for quotes all the time. We have a policy to shop every three years for insurance. I have to obtain Liability, D & O, Fidelity, sometimes an Umbrella policy, worker's comp and maybe earthquake. No wind or flood. I manage 50 account and none have filed a claim in 6 plus years, so no Loss Run report to worry about.

On a new policy, a reputable agency will ask for CCRs and Bylaws and a set of financials. Today, I got an email for one client, and below are the questions asked of me for this client.

A list of the current Board Members
A copy of the current Income Statement
A copy of the current Balance Sheet
A copy of the most recent Reserve Study
Has the Association added any employees?
Does management provide employees to the Association, such as onsite management, maintenance or landscape personnel?
Has the board or management been informed of a matter that may result in a property or liability insurance claim?

The agent should know state codes when putting a quote together. How much insurance per state code or CCRs is required for the HOA, how much theft insurance is required. What type of property is it? Condo, detached homes, what is the HOA responsible for, what are homeowners responsible for?

That's just for starts.

After having slept on this, I believe I placed the cart before the horse in my first reply, although my response, and those of Max, identified possible reasons why the quote you obtained from another company may not have been comparable to your increased policy expense.

What I should have suggested is I recommend you and the other owners press your board very hard for an explanation for the increase in the year over year policy expense. It is possible there are very valid reasons for the increase. They include: general rate increases, new types of coverage, increased coverage amounts (perhaps the association was under insured, the replacement cost of the building(s) certainly increased in the last year), changes in how deductibles are calculated, etc. Your board, and the agent used, should be able to explain the reasons for the increase.

The fact the expense doubled does not necessarily mean something inappropriate is taking place, the increase may be completely justified and you and the other owners dodged the bullet of not enough insurance. However, you and the others are paying the bill and have a right to understand the reason(s) for the increase.

I do not recommend you seek other quotes, that is the responsibility of the board. Even if you obtain what appear to be more favorable quotes, you are not empowered to bind the insurance and can do nothing with the information you receive besides present it to the board.

I question the value of the information you received from another agent as he or she did not obtain enough information regarding your association. For example, the Declarations of associations we have seen always state the minimum coverage amounts required for property and liability insurance, and sometimes other types of insurance. If the agent did not ask for the declaration requirements, the quote you received is of little value for comparison purposes.

There is no reason why the board should not provide an explanation for the increase as well as an explanation of what has been done to determine if the coverage requirements can be obtained from another carrier or carriers at lower cost.

I would question the integrity of an insurance agency, or any vendor for that matter, providing community quotes to someone other than the Board or the MC without their permission.

You stated that you "got a quote" from another company. Without them reviewing your governing documents, or receiving a loss run report, they are quoting blindly. Much like a car dealership offering 0% interest until they run all the facts.

Condo HOA Master Policy insurance is specialized and there are limited insurance companies that provide that coverage. You can be even more limited by the construction and age of your building and amenities.

We changed insurance providers yesterday. We looked at our renewal and 2 additional quotes. With our age we are pretty much limited to 3 top insurance companies who will underwrite coverage in our area. We discounted one because the minimum deductible they would write was high.

We did switch after reviewing all coverage and will be saving ourselves 50% in premiums in the upcoming year. We may have a surprise next year at renewal.

If your Board refuses to provide the reasons for their choice, you are able to vote them out at the next annual meeting or pay for legal advise. Don't think you'll find anyone pro bono to review HOA issues.

CathyA3,

In our case we switched from an A+ rated insurance company to an A+ rated insurance company that has been covering HOA's for many years, so not new to the marketplace. We did have to change insurance agents to secure that coverage.

Our Board could not ignore the cost savings and reviewed the coverage carefully. Coverage from the new company was also much better.

In order for any insurance company/agent to properly quote, they would need a copy of the existing policy to serve as a basis for their quote. That way it is apples to apples.