MN governing documents regarding Master Insurance Policy

The master policy would cover the association's common areas, so you might want to start with reviewing the areas that are association vs. homeowner responsibility, and then make sure the board (all of you) reviews the policy to ensure the common areas are covered. The deductible works similarly to the one on your own homeowner policy, so you could review your operating budget every year to ensure the association can cover that so you don't have to file a claim. As you know, too many claims and/or expensive ones can ultimately lead to higher premiums and possibly getting dropped, and it's already getting more difficult to find HOA master policies.

Insist on homeowners having their own policies - they should be working with their agents to review the association's coverage to ensure there's no unnecessary overlap, and that would also include covering the association's deductible if abuse, misuse or negligence by the homeowner led to the damage. They should also understand that if there's damage that may be the association's responsibility, they must notify the association FIRST, so their carrier can coordinate with the association's policy to verify whether the damage is, in fact, the association's responsibility. That should be done before repairs are done (otherwise the homeowner should be responsible), but you'll have to allow for emergencies - talk to your master policy carrier to see how that should be handled.

Finally, a periodic risk assessment may be a good idea to see what the association can do to avoid repairs, whether or not they're covered by insurance or not. For example, there have been several conversations on this website about sewer damage from tree roots, especially in older communities where everyone used clay tile piping once upon a time. In our community, the homeowner is responsible for utility lines from the point they enter the unit, so the association would cover the lines on the outside, but nothing else. This led to several expensive repairs because (1) the trees were planted too close to the building by the developer (2) the wrong type of trees were planted - people forget tree roots are twice as long as the tree is tall, so that little five-foot sapling at the hardware store's garden section may grow into a Goliath of a plant 10 years from now (3) people installed flower beds that covered sewer cleanouts (they were flush to the ground) and so you couldn't dump Rid-X or other tree root killer to reduce the risk of line damage.

When our insurance premiums spiked because of that (we nearly lost it, in fact), we had an arborist inspect the community to identify the more problematic trees and cut down several of them (they were already near the end of their lives anyway), and also ran articles encouraging people to add sewer and water damage coverage to their policies (this usually isn't included in a standard homeowner's policy). There were also articles about making sure you didn't drop things like diapers or soda cans in your toilet (that happened) and we included the cost to the homeowner. We'd also recommended people flush tree root killer in the sewer line cleanout (or at least the toilet) once or twice a year. Encouraging homeowners to take care of their property instead of expecting the association to cover every bloody thing can help a great deal.

Hope this helps!

Our condo multi-story building''s CC&Rs were restated in 2022 & the below is from the Article on Insurance:

10.14. "...In the event of a loss for which Association insurance coverage is used, and, for the avoidance of doubt, in the absence of any actionable negligence by the Association or any Owner or any per- sons whose negligence or willful wrongful actions have caused such loss, the responsibility for payment of any deductible shall be as follows:"

"10.14.1 Owner Sole Responsibility for Deductible. Owners shall be responsible for the cost of any deductible if the damage or loss occurs to the Owners' personal property, or to Improvements that the Owner is responsible to repair or replace."

"10.14.2 Association Sole Responsibility for Deductible. The Association shall be responsible for the cost of any deductible if the damage or loss occurs to the Association’s personal property, or to Improvements that the Association is responsible to repair or replace."

"10.14.3 Apportioned Responsibility for Deductible. If the damage or loss occurs to both Improvements that the Association and/or one or more Owners are responsible to maintain, the responsibility for the payment of any deductible shall be apportioned among the affected parties on the basis of the ratio of each party's separate responsibility for the cost of repair or replacement to the total costs of repair or replacement, as such is reasonably determined by the Board in its discretion."

I assume "improvements" are defined in your CC&Rs the way they are in mine in Calif.? Also note our master insurance is "Walls In" so does not cover the repair/replacement of damage in condo units see Sect. 10.14.1. Our CC&Rs require that owners carry their own HO6 policies,

Thank you. I don't believe it should be assessed any differently. Some of the community members believe it should be assessed differently. Each of the 7 buildings carry individual deductibles. The example given is: "In a 4 unit building when only 1 unit of the building is damaged by a tree falling on their unit the other three shouldn't have to pay".

I disagree with their argument. It is one building that the units share a common roof and exterior structure, therefore they all should share in the deductible. Our governing documents are not very explicit regarding this topic. I am interested in adding verbiage to clarify sharing of the master policy deductible.

Thank you. I'll verify.

Thank you for your responses. Your combined knowledge is valuable and helps our community.

Thanks,
Todd

So, Todd, you can see from Michael's fine example of "all-in" policies, which cover fixtures, cabinets, etc., and maybe more. My HOA has a "bare walls" policy and only covers walls/ceilings sheet rock and actual damage to flooring

I believe your insurance agent would be happy to explain your coverage as mandated by your CC&Rs to the Board, or better yet, today, a Town Hall meeting with Owners. I think this is important. Since it sounds like your have a "bare walls policy," as do we, Owners still some times think the HOA issuance should cover damage to stuff inside their unit if caused by a common area leak. that's not the case unless the HOA has been negligent.

If you do not understand the meaning of "Improvement" see the glossary in the front of your CC&Rs. I don't know if this language is used in MN. It does not mean as some assume "upgrades."

Our below was restated in 2022. I've pared them a little...

CC&R Article 10
"10.2 PROPERTY INSURANCE. The Association shall keep (i) any Improvements within the Common Area and the Association Property to be maintained by the Association insured against loss by fire and the risks covered by a “Standard All-Risk of Loss or Perils" insurance policy . ...and (ii) all personal property owned by the Association insured.... as determined annually by an insurance carrier selected by the Association. Insurance proceeds for Improvements in the Common Area and the Association Property Encroachment Areas (excluding Units) and personalty owned by the Association shall be payable to the Association….”

"10.2.1 Description of Policy Coverages. The policy shall cover the following real and personal property:"

"(a) Common Area and the Association Property. All Improvements within the Common Area and the Association Property ... including buildings and any additions or extensions thereto; all fixtures, machinery and equipment permanently affixed to the Condominium Building and not located within a Unit; fences; monuments; lighting fixtures; exterior signs; personal property owned or maintained by the Association; and recreational facilities…."
"(b) Landscaping. Lawn, trees, shrubs and plants located in the Common Area...."

"10.3 INDIVIDUAL INSURANCE. Each Owner shall maintain property insurance against losses to personal property located within the Unit and to any upgrades or Improvements located within the unit and liability insurance against any liability resulting from any injury or damage occurring within or outside the Unit ….complying with any other requirements relating to insurance maintained by an Owner as may be specified in the Rules. The Association's insurance policies will not provide coverage against any of the foregoing. Owners must provide a Certificate of Insurance to the Association within thirty (30) days of procuring or renewing their insurance policies or upon demand by the Association."

Note that elaboration or clarifications could be found in our Rules & Regs. (NOT in our Bylaws.---or in yours.)

I'd forgotten the below, Scott as it hasn't been discussed since we rewrote our CC&Rs. At our HOA attorney's advice, we left it alone we have 31+ different unit sizes and changes we'd considered were too insignificant to get tangled up in, which would distract & confuse voters.

The below is original and was the developer's work. He assumed that larger units would consume more HOA-provided gas and water than smaller units. Re: the master insurance policy, he realized that larger units had a lot more exterior common area to cover with insurance than smaller units.* So he arranged a square foot variable allocation, which is not unusual in condo buildings:

Art. 6. Assessments. 6.10.1 "(a) Residential Condominium Owners Allocable Share. Residential Owner contributions to the Base Budget shall be allocated to the Residential Condominium Owners in accordance with the square footage variable allocation formula set forth in Exhibit A, attached hereto and incorporated herein...."

Taking into account the 3 factors here's what the difference looks like in my HOA. Above the basic mo. assessment, a 1,070 sf condo pays $66 extra; a 1,155sf, $77; 1,966sf, $122.

So even though the water & gas variables are nonsense--there's very rarely more than two persons in a unit as all are 2 bd.-- the bld. exteriors insurance variable rate seems logical & fair-- at least to me.

Sorry, I meant "Todd."