Association Insurance

Started by SusanC2 • 4 replies • 2162 views

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SusanC2 (Montana)
Posts: 5

Posted:

I am president of a new small Homeowner's Associaion (20 homes) in Montana. The homes are of varing sizes,some with finished basements and some not.Our Bylaws state that the Association Insurance for each home shall be part of the common expense. All homeowners are paying the same monthly fee for the cost of the insurance and many of them are complaing this is unfair.... Those with bigger houses should pay more.
Can the Association premium be broken down into individual homeowners premiums based on square footage (which the Insurance Carrier has done already to figure Assoc. Premium) and have homeowners pay different amts monthly or pay their premium annually or is the only way to change the bylaws to reflect insurance premium based on sq footage??

CharlesW1 (Georgia)
Posts: 826

Posted:

SusanC2,

I would agree with them as well. It wouldn’t be fair, to me and my family. Why isn’t the homeowner required to provide the home with insurance of their choice? I know my insurance is discounted if I use their services for life insurance and car insurance, combined with homeowners insurance.

What if a ranch of 3300 square foot with a basement vs. a two story with out a basement, unintentionally burned to the ground? How can an insurance company charge the same to rebuild. Here in Georgia, I know that a basement is considered living space unless it is plumbed for plumbing and it has central heating and air. If there is a bedroom it must have a window as well. So there is a lot for a homeowner to consider when finishing a basement. These are all expenses that some will not have to pay for nor should they if something disastrous were to happen. Probably very similar in price, but because the home with a basement has potential a greater resale because of size, being a single story and having a basement.

I hope you receive the advice you are in search of here at this discussion forum.
Chuck W.

Charles E. Wafer Jr.

SusanC2 (Montana)
Posts: 5

Posted:

Thanks for your reply...Eventhough each home is insured for a different amount (based on sq footage, finished basement, etc) we all pay the same amount per month for insurance as part of our monthly fees.. not fair!

JoeS4 (Kentucky)
Posts: 77

Posted:

I don't believe that anyone can force you to buy a particular insurance, they can make sure that it meets certain standards or that they have a copy of it but insurance must be bid if every homeowner is to agree on the company and then it should be bid each year. To finish my first statement, ask a local attorney as well as ask the insurance representative about adding lots of additional insurance on contents, how does that effect pricing, what about replacement cost. I think that your bylaws or whatever document may be violating one of your other rights that would may require some new wording.

JosephW (Michigan)
Posts: 882

Posted:

Until you change the documents, you have to follow them, which means everyone kicks in, even if some places are larger. Attorneys have been getting very creative with insurance clauses in association documents. Find one that knows what they're doing and get the docs amended. First, however, talk to your agent and see if the difference between what each owner is paying to the association now for insurance, and what their individual policy will increase to, is enough of a difference to make it worthwhile.

Joe

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