California Insurance woes

In my opinion, going with the MC insurance broker is bad.

Get the info you need and email it to companies and brokers yourself.

See what comes back.

Thanks Tim. Yes I thought so.

Hi Kerry! no worries on the other post... our community changed MC last year and the HOA did not have a relationship with any current insurance brokers. So when we knew our policy was going to expire come march the MC suggested that he had a good broker for our community.

I saw the brokers name on some forms he wanted us to submit, but it was on our homeowners app. that is set up through the MC. I thought that was a bit strange so When I asked them about it at our last meeting the mangment company said that "yes he's an independant insurance broker and from time to time he will do part time work for us in our office."

Hi Kerry! no worries on the other post... our community changed MC last year and the HOA did not have a relationship with any current insurance brokers. So when we knew our policy was going to expire come march the MC suggested that he had a good broker for our community.

I saw the brokers name on some forms he wanted us to submit, but it was on our homeowners app. that is set up through the MC. I thought that was a bit strange so When I asked them about it at our last meeting the mangment company said that "yes he's an independant insurance broker and from time to time he will do part time work for us in our office."

Hi Kerry! no worries on the other post... our community changed MC last year and the HOA did not have a relationship with any current insurance brokers. So when we knew our policy was going to expire come march the MC suggested that he had a good broker for our community.

I saw the brokers name on some forms he wanted us to submit, but it was on our homeowners app. that is set up through the MC. I thought that was a bit strange so When I asked them about it at our last meeting the mangment company said that "yes he's an independant insurance broker and from time to time he will do part time work for us in our office."

Insurance brokers work either on commission (paid by the insurance company) or for a fee (paid by the customer). I suppose the broker might say to the MC: "Hey, if you send business our way, we will give you (the MC) a discount on our services." But I am not sure this is a big deal.

This sounds like nothing more than the MC referring the HOA to a vendor that the MC also happens to use. Given the tight timeline; the struggle so far to find any insurer; and reports of the many HOAs also struggling; I think your Board's focus should be on getting insurance a.s.a.p. I suggest asking the MC and broker to put in writing any relationship it has with the other (broker or MC), including any money either stands to make from the other; put this statement in Exec Session Minutes; and move onto getting insurance.

I just saw your post. I also live in a community struggling to get adequate insurance for an HOA in California. You are not alone. I am not on the board but I have been focussed in understanding the issue by attending legislative meetings, researching CDI and CAR regulations. We've been dealing with insurance woes for 2 years. Our CC&R's indicate there cannot be a contract with anyone that is "associated or related" to the HOA board. But the person you are referring to is "working" for the PM. If there is a referral fee, not uncommon, how can you prove it? That could be a conflict with DRE laws that regulate Property Managers. Check out the CDI regulations regarding fee disclosure and California DRE for regulations. Both, are strong in stating, Full Disclosure. If you hire a broker to procure insurance for your community, the insured (HOA) pays the fees/commissions/incentives. The agents that sell the insurance to the HOA, via the HOA broker, gets paid by the insurer (insurance company) they represent. If any of these policies are from the Surplus Line (a market of insurance companies not licensed by California,) their commissions are not regulated by CDI. I'm guessing commissions are very high, I recommend you "Follow the money." If you are on the board, you should have that information. If you're not on the board, good luck getting that information. My inquiries regarding commissions/fees/referrals/incentives have remained unanswered by both board and PM, for 2 years.

It is impossible for someone to just start calling insurance companies. There are a lot of details that are required to get a quote. The HOA must be marketed and there are many factors, some very complicated, that are involved. Experts recommend a lead time of 120 days and possibly more if you are in a high risk area.

Good luck to you and welcome to a problem we are all facing in California. I suggest you get on the CDI mailing list so you can get updates and announcements, or attend some of their meetings or legislative meetings, via zoom. I have done that as a homeowner, boring but important.

DioL.
You have alot of good information.Thank you. Yes I'm a board member so I have access to information. I just spoke with a friend of mine that is a broker. (my husband just reminded me, so I gave her a call). Yes its very unfortunate the state of california right now. She said that The quote that the HOAs broker gave me might very well be the case. She said all brokers have access to different insurance companies, and That it sounds to her like the PM isnt really doing there job at finding the best insurance. A good PM would have went to 3 different brokers and got quotes to find the best coverage instead of just "using there guy". So looks like we will have to do the PM job and hunt for ourselves. Just joined the CDI mailing list as you recommended.

Good luck to you as well.