Master Policy and Unit Owner Policy June 11, 2015 Insurance

Insurance is the means we use to financially transfer risk. It is the most important element of management that we facilitate for our clients. It will take your involvement to protect your association’s funds. Assists with the marketability of your units. What is Insurance

Master Policy vs. HO6 Master Policy is outlined in bylaws HO-6 originated as this new form of ownership was created. 1, 2, 3 are forms of home owner coverage. 4 is tenant coverage 5 is upgraded coverage for HO3 without adding additional endorsements 6 is for owners of commonly owned property

Document Provisions By-laws-Insurance Article must be read and evaluated along with the following Repair and Reconstruction Article- These two provisions work together Additionally some By-laws Restrictions allowing the deductible to be back charged if unit owner caused the loss.

Typical Language A. All Common Elements of the project shall be insured against fire and other perils covered by a standard extended coverage endorsement, in an amount equal to the current insurable replacement value, excluding foundation and excavation costs….Such coverage shall also include interior walls within any unit and the pipes, wire and conduits…. And all fixtures, equipment and trim within a unit which were furnished with the unit as standard items in accord with the plans and specification thereof as are on file B. Typical Repair and Reconstruction Language If the damage is only to a part of a unit which is the responsibility of a co- owner to maintain and repair, it shall be the responsibility of the co- owner to repair such damage as listed. C. Deductible cost back typically found in Restriction-Co-owner Maintenance

Prior to emergency personnel leaving the scene, they and you have the responsibility to defend the balance of property. Board up roof and broken windows with plywood, possibly provide fencing or security Often times, fire departments have preferred vendors they want to call - be careful If possible, you may want to contact your site maintenance personnel to handle the board-up. Duty to Defend

Sharing of Loss Regardless of the loss, the association may have responsibility to replace GCE to “standard fixtures, equipment and trim”. Betterments and improvements should be discussed by the Directors. Cummings consistently builds a case for them to be the unit owner’s responsibility to insure and replace.

Master Policy Only a Director or manager can make a claim against Master Policy. Directors must have input in building replacement values Liability coverage Ordinance and law Fidelity bond coverage

Betterments and Improvements What are Betterments and Improvements? How do the two companies work together?

Unit Owner Policy  Coverage Consideration:  Building Property  Personal Property  Personal Liability  Loss of use  Loss Assessment

Additional Coverages Additional Loss Assessment Back up of Sewer and Drain Business Related Activities Earthquake

How can you be proactive? Encourage your Board to sponsor an insurance workshop For multi level associations, find a way to get water alarms into the hands of unit owners. Put something into your newsletters each year about HO-6 insurance needs. Have insurance agent attend some meeting annually.