Posted On: June 4, 2008, 8:54 am CDT

Posted By: John Scrader

I once owned a condo and was president of the BOD for 6 years. At my first insurance renewal, I reviewed our loss runs and was totally shocked when I found that individual unit owners had submitted claims on the HOA insurance for damages that were clearly their fault (ie washing machine over flow). We had 5 losses in 5 years and ALL of them involved property not owned by the HOA.

I had to lay down the law at our first board meeting. Just about everyone that lived in the complex assumed that the HOA policy covered their interior unit. I broke out the CC&R's and it clearly stated that the HOA is responisble from the sheet rock inward, common areas and roof. After I formerly informed the people in my complex, I sent a letter to our agent with a copy of our current CC&r's. I informed them that they are in no way shape or form authorized to take claims from anyone except the board of directors, that BOD is the named insured, period!

Basically I learned at this meeting that only one person besides myself had their own insurance. So no one had any liability coverage, and none of their personal property was covered.

HOA insurance covers only property & liability that is owned and the responsibilty of the HOA. The courts were 100% in their decesion. Any agent that took the side the members of the association is totally and absolutely incorrect. Why in the heck would someone want there already expensive HOA insurance to go up for claims that they were not responsible for??? Last time I checked insurance premium is directly related to claims.

After three years and no claims from individual unit owners, my insurance went down 20% and I saved the HOA a ton of money.