As many homeowner’s association property managers know, there are numerous risks that you might encounter. From neighbor complaints to inadequate insurance policies, there is no shortage for potential exposures in any HOA. However, there are steps you can take to secure your association. While HOA’s hardly consider insurance policies, let alone investigates them, this could be your first critical mistake. While your insurance provider might recommend basic coverages, you are likely still exposed to major losses. However, with the right Ventura County HOA Insurance Package, we guarantee your association will be secured without any gaps or missing coverage. In this two-part article, we will explore the important ways in which property managers can secure their associations.
Have your insurance policies evaluated.
Unfortunately, 90 percent of the HOA’s we assess are missing pertinent coverages and violate the CC&R’s requirements. That’s a sobering statistic for any HOA. Further, the coverage you have may only protect your management company rather than your HOA itself. For example, according to Hindman Sanchez, if a management company employs a community association manager who steals $100,000 from a reserve account belonging to an association, only the management company can file a claim with its insurance carrier on behalf of the loss suffered by the management company; the association has no direct claim on the proceeds of the management company’s fidelity insurance. Further, the article also states that in order to access such proceeds the association would need to file a lawsuit against the management company to recover the stolen funds and any legal fees incurred as a result of the filing of the lawsuit would have to be paid by the community association until a settlement was reached or judgment obtained.
Therefore, if your HOA had its own Fidelity Coverage, you would be eligible to make a claim immediately and not front any money for legal bills. It’s also important to note that your association’s Directors and Officers coverage would not provide protection in the event of a theft- this is a completely separate policy.
But, I thought we were already covered…
This is just a single example of exposures that might exist. While your insurance agent may be nice enough, and even stop in with treats from time to time, that doesn’t mean they have your best interest. Have you checked to ensure your association is covered from a major California disaster such as an earthquake or fire? If so, are the right coverage amounts in place? You could be severely exposed. If this is the case, how friendly would your agent appear? It’s their responsibility to protect your HOA and advise you on the right coverages. Without this service, your agent may be fraudulent. Stay tuned for our next blog that dives deeper into these issues.
At Scott Litman Insurance Agency, we are dedicated to your HOA’s success. We strive to ensure every HOA in the greater Los Angeles and Ventura areas are rightfully protected. We pride ourselves on our expertise and commitment to customer service. For more information about the products you need to be completely secured, contact us today at (855) 999-4505 or fill out our online form.