HOA Master Policy Insurance

Why wouldn't the Board want to ask these questions of the insurer?

In my opinion, not doing so represents a huge risk.

We are discussing this with the current insurance company - and a second company that is bidding our insurance.

They are offering slightly different coverages.

I would like to hear from board members.

If you're not sure what's what, why not ask the insurance company? This may be a good time to get quotes from other insurance carries - maybe you can find a good deal. That said, remember Surfside has lots of insurance companies rethinking their HOA coverage - they're either getting out of it altogether, or jacking up the premiums or offering additional coverage for even more money. They are businesses, after all. In general, I would say getting replacement coverage is a good idea - if you were in a single family detached house and it burned to the ground, the replacement cost coverage would help you rebuild the house at the costs at that time because today's prices can and do go up.

It doesn't sound like any of you are reading your policy to see what's being covered right now and for how much, so I suggest you start there. Take different sections if necessary and each of you can make a presentation to the others. Maybe talk to a few contractors that have done major repairs and replacement on other communities to get an idea how prices are running and how they might increase in the future and how fast. Of course, no one can predict the future, but you can get some things to think about. If this extra 50% is for unique circumstances, read that too - if you've been reading the paper (or a news website), you know there is an issue with supply chains and the Great Resignation/Quit or whatever you want to call it has created labor shortages - that's part of the reason some things are scarce and you're paying more for it. All of these can help you determine what you need and how much. And don't forget changes in building codes that can also play a role along with your own documents that tell ou what areas should be covered.

(of course this additional coverage wouldn't be free - where'd you get THAT idea????)

Must of us here aren't insurance pros, and association insurance can be tricky - even the pros scratch their heads sometimes.

In addition, insurance coverage depends on the nature of your community as well as on the language of the CC&Rs - it's why insurance agents ask customers to send them copies of the CC&Rs when they work up quotes.

So others' experience may tell you nothing about what would be appropriate for your community, or worse be misleading.

I think I get it now. I think the following site presents helpful discussion:

https://www.policygenius.com/homeowners-insurance/what-is-extended-replacement-cost/#how-does-extended-replacement-cost-work

I think the bottom line is that the extended coverage is insurance against both (1) the possibility of house construction price increases for any reason following a home-destroying disaster; and (2) the possibility that the main policy's insurance for one reason or another is not sufficient.

The site I linked above does speak of certain unique circumstances. But my take overall is that the cost to rebuild a house to its original condition is what it is. What the main insurance policy covers is what it is.

Back to how I would vote if I were on this Board:
If the current cost to rebuild is $400 - $450 per square foot, then I think the main insurance policy (without extended coverage) should cover $400 - $450 per square foot. Why? Because the point is that this cost (of $400 to $450 per square foot) may shoot up due to supply and labor shortages after a disaster. When it does, and if the HOA has not purchased extended coverage, the HOA units will clearly be underinsured.

Aside: JeffR11, is the condo association really responsible for insuring the interior structure (walls, ceilings, sinks, everything nailed down, et cetera) of condo units?

Tha HOA Master Policy liability ends with the interior walls.

Owners must buy their own insurance to cover interior fixtures and person property.