Condo Media - February 2012 - 26

HOMEOWNER’S CORNER

Guardian Angel
The Association Insurance Agent Provides Invaluable Guidance and Assistance
nsurance agents, like doctors, have a broad range of specialties and areas of expertise. Fortunately, community association insurance is one of them. Community associations have unique needs and exposures, so the board should be diligent in selecting an agent with experience in the community association area. Insurance agents are professionals that can assist the association, board members and owners by:

• Reviewing the association’s documents, recommending the legal min•

Statewide RM
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Kieran Fitzgibbon – President

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imum insurance requirement and recommending additional coverage that might be appropriate. Inspecting the community and identifying exposure that needs to be addressed. Verifying the property values for replacement and/or reproduction costs. Reviewing the association’s fidelity bond, and ensuring that all appropriate parties are included. Obtaining premium quotations and helping the board select the best program. Educating the board about coverage, exclusions and limitations. Educating the residents about the association’s policy, where it stops, and where the residents’ and owners’ responsibilities begin. Providing certificates of insurance or evidence of coverage to lenders. Helping the board decide how claims deductibles will be processed. Creating a claims procedure manual. Customizing a risk-management program. Assisting the association to establish procedures for service providers. Reviewing the association’s claims annually, and recommending how to reduce future claims.

Of the many things association assessments pay for, insurance is one of the most important. Association governing documents and state law require the association board to purchase adequate insurance as part of a comprehensive risk-management program. There are two types of commercial insurance coverage: property and liability. Property insurance covers loss of, or damage to, any common structures or physical property caused by fire, flood, storms or other natural events. For instance, if high winds uproot a tree that damages a common roof, the association’s property insurance would cover the cost of repairs. Property insurance may also cover “human perils” (such as theft) and “economic perils” (such as stock market fluctuations) that might impact the association’s investments. Liability insurance covers losses that would result if someone took legal action against the association for an injury, financial loss or other type of damage. For example, one important type of liability insurance, Directors’ and Officers’ insurance, covers volunteers, such as board and committee members, so they’re not jeopardizing their personal assets to serve the association. The association’s insurance does not cover owners or residents, their homes or belongings. Each member should have his or her own insurance policy. Homeowners seeking insurance information should speak with a licensed insurance agent who specializes in associations. Or you may want to talk to the association’s insurance provider; this person will know exactly where the association’s master policy coverage ends, where yours should begin, and prevents homeowners from overor under-insuring themselves. CM

CONDO MEDIA • FEBRUARY 2012

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Condo Media - February 2012

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