Low maintenance and modern amenities make condo living an excellent choice for young and old alike. But, as an association board member, your rose-colored glasses may be becoming tainted. There are some circumstances where every board member can be faced with some of the most dangerous situations. Some of these can be so dangerous that they can have a direct negative effect on the person who is responsible. In this case, we are talking about a board member.
Therefore, you need to be focused all the time. Surely, this is something that can inflict some serious problems to people who have decided to become board members. Are you kept awake by disputes, construction defects, and threats of lawsuits? If the cost of repairs has you tossing and turning – you’re not alone. Thankfully, there are some ways you can protect yourself from all the bad influences that can arise from time to time. You need to be prepared for all of these circumstances. Being smart will provide you a lot of benefits, you can be sure of that.
Insurance can provide the cash flow to address many of the issues of community living. But only if you’re adequately covered. Board members can be held personally liable for costs.
That’s if they have been negligent in arranging the right insurance. That said, you, no doubt, want to know how you can protect yourself. Let us take a look at what can be done in order to provide the necessary layer of protection for board members. Without further ado, let’s talk about it.
What is Condo Association Insurance?
In short, Condo Association insurance covers common areas. It pays to repair any property damage. But also, for damages from injuries that occur in communal spaces. Without any doubt, we are talking about the thing that can provide some serious coverage for the damage many properties can suffer from a wide array of different influences. Therefore, this is something that can be described as one of the best things for people who’ve suffered some of the worst damage that can be inflicted by weather conditions.
But you need to be aware of what kind of coverage you can expect depending on the kind of damage your home suffered. Conversely, it does not cover damage occurring in or between units. Nor does it cover owners’ personal property located in units. So, you need to be sure that you’ve pointed out all the things that condo association insurance covers. In case you would like to learn more about this type of insurance, click here. (Owners should have personal HO-6 policies to cover their units.)
Is Condo Association insurance compulsory?
Unfortunately, condominium insurance laws differ between states. Additionally, they can, and do, change from year to year. You are obliged, foremost, to have whatever insurance is required by your state laws. Therefore, informing yourself about all the elements of this kind of deal is an absolute must. If you are not careful, you can expect some of these to backfire right into your face and could have some really bad effects on your finances.
As we’ve already said, these things are different from state to state. Therefore, you need to be absolutely sure that you learned all the details that are essential for you. So, make sure that you’ve learned them before you are able to conclude this kind of a deal. In the event, there is a conflict between your associations’ governing documents and state law – then state law will prevail, you can be sure of that. So, do everything in your power to prevent this from happening, be sure that your papers are absolutely clean.
How do board members fulfill their duties concerning insurance?
- Condo Association Insurance is complicated. Make sure you deal with a knowledgeable broker – one who knows the local state laws.
- Provide your broker with copies of your association’s governing documents. Get confirmation of receipt.
- Laws, building costs, and property valuations change frequently. With this in mind, review your insurance at least annually.
- For the purpose of the above, analyze replacement costs regularly. (Property cover is based on replacement cost, not market valuation.)
- Read the fine print of any insurance policy. And pay particular attention to deductibles. Reduced premiums often come with increased deductibles. Ensure the association’s funds can cover these before accepting them.
- Take out Directors and Officers Liability coverage. It will cover you if you’re ever sued personally. Like when your decisions adversely affect the association. It pays legal costs as well as any damages.
- Consider Fidelity Bond/Employee Dishonesty coverage. It covers funds in the event of theft by staff or board members.
- Last but not least, have a disaster management plan in place. Insurance claims can take time to process. And board members are responsible for the well-being of their community.
Take a proactive approach to your Condo Association insurance. It will protect the value of your investment. Ensure there are no gaps in coverage and that the insurance meets all requirements. The reason is that these gaps can cause some serious problems. Therefore, prevent all of these negative things in order to prevent all of the problems you can come across.
You don’t want to be under or over-insured. This is something that can produce some of the most negative effects you’ve experienced. By doing this, it will ease your mind knowing you’ve fulfilled your duties. Keeping everything clean will make sure that you will have a peaceful dream. Thus, leaving you free to enjoy the benefits of community living.
We know that there are many uncertainties about this concept. So, you should inform yourself properly before you make the decision to conclude any kind of deal with an insurance company. In order to help you with getting a better glimpse of this concept, we’ve provided you with this article of ours. We hope that you will find it useful enough in the future and that it will have an influence over your future decision.