FL Responsibility of HOA Insurance Renewal

Started by MichaelB55 • 8 replies • 260 views

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MichaelB55 (Florida)
Posts: 2

Posted:

First wanted to preface with some backround. We are a small 2 building association in SW Fl that has never had an active board with most if not all responsibility falling to the President (I know this as I had formerly been in that position for many years). Also the management company we had was relatively new to us as the previous management company merged with this new company and there was no transitional paperwork relating to a new contract with this company and our association.

With this being said we found out that our property insurance policy had not been renewed and we received substantial damage from Hurricane Ian and now must pay for it out of pocket. So far its been a blame game between the deteriorated relationship of the now former President and management company, but both sides knew about the renewal and the bottom line is it didn't get done. Does anyone feel that the management company bares any responsibility for this happening or does it fall solely on the Board? The Board has contacted attorney's that are claiming a derelict or negligence on the management company so wondering of thoughts about this or any other recommended action. Thanks, Mike.

LoriM15 (Florida)
Posts: 1,009

Posted:

We are in the process of signing a contract with a new management company (also in SW Florida). Our old one is also a big company here. Under both of these contracts, the management company would bear some responsibility for this mistake.

Depending on how much money you are talking about, it makes sense to pursue a potential lawsuit against the management company. But a lawsuit is going to cost money and you will have to pay for that out of your pocket also.

There are some excellent HOA attorneys in our area. There are some you should really stay away from, including the one that is the biggest name in the area and writes articles in the News-Press and Naples Daily News. I know this from experience.

There may be more to this story that will come up if you do pursue a lawsuit - like was the president or other board members aware but didn't want to spend the money? Or didn't have the money?

Also, keep in mind that the amount of damage from Ian may not have been covered by insurance anyway. We met our deductible in some areas but not in others, so we expect to be out of pocket for about half of the damage.

Good luck with whatever decision you make.

SheliaH (Indiana)
Posts: 6,964

Posted:

The property manager works at the direction of the board, so I'd say this is the board's fault. It would have been nice if the manager let the board (such as it was) know the renewal was coming up, and then a vote could be taken.

You had a budget and were paying assessments all this time- didn't anyone take a close look and notice insurance wasn't listed? Sorry, but this falls on the association- all of the owners. Ultimately, it was the owners responsibility to see that a board was established and functioning, but you noted everything would fall on the president. You don't say how long you had the spot, but I would have thought you would have sounded the alarm that apathy was going to get everyone in trouble. And now it has.

Hasn't ANYONE in this state learned anything from Surfside?? At the end of the day, no one will care about your property more than you and so you have to watch and verify that things are being done and done leave it only to the board or property nanager. Y'all will have to take your lumps and learn from this. Good luck to you.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By MichaelB55 on 02/19/2023 6:31 PM
First wanted to preface with some backround. We are a small 2 building association in SW Fl that has never had an active board with most if not all responsibility falling to the President (I know this as I had formerly been in that position for many years). Also the management company we had was relatively new to us as the previous management company merged with this new company and there was no transitional paperwork relating to a new contract with this company and our association.

At the time the insurance terminated, was there a contract or was there not a contract with the management company then in place?

Since you indicate the HOA has talked to attorneys about this, I wonder why you are asking here. Did these attorneys look at whatever contract was in place?

Two of the most important questions to ask an attorney are:

How much in attorney fees might this cost the HOA?

What are the chances of prevailing?

As a matter of law, I disagree that "most if not all responsibility" falls to the President here. Statutes and bylaws alike say the responsibility is on the board and no one director (not even the president).

NA1 (Massachusetts)
Posts: 190

Posted:

Surprised the lien holders didn’t notice. Our agent gets requests for insurance statements right around the renewal date

LoriM15 (Florida)
Posts: 1,009

Posted:

Quote:

Posted By NA1 on 02/20/2023 3:16 AM
Surprised the lien holders didn’t notice. Our agent gets requests for insurance statements right around the renewal date

That might be true of condo associations, but we don't get insurance requests for our HOA - unless somebody trips and falls, of course.

NA1 (Massachusetts)
Posts: 190

Posted:

Quote:

Posted By LoriM15 on 02/20/2023 9:08 AM

Posted By NA1 on 02/20/2023 3:16 AM
Surprised the lien holders didn’t notice. Our agent gets requests for insurance statements right around the renewal date

That might be true of condo associations, but we don't get insurance requests for our HOA - unless somebody trips and falls, of course.

Yes. I interpreted the OP's comment about being a small 2-building association as describing a condo, but you're right they may not be.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Out PM found our insurance company. Each year the insurance company bills our HOA via our PM. I would think if we went uninsured it would be the PM's fault.

MichaelB55 (Florida)
Posts: 2

Posted:

Thank you all for the responses! We have just started with the attorney so was looking to see the opinions of how far we should go with this. I'd agree that it shouldn't take long to let us know whether or not we should continue pursuing by just requesting the correspondences between the Board and management company regarding to the renewal. I believe I can support some initial investigation and will be wary if I feel this would drag along racking up heavy legal fees.

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