HLV HOA 2022 Insurance

Hello everyone, the HOA is just in the process of writing checks for the annual insurance costs for the policies that cover the assets and activities of the community. Again, this year the assessment was within a couple of thousand dollars for the policies in an “as usual” mode. The assessment was a little higher than the cost “as usual”. However, the insurance market changed dramatically this year. 

The market this year dropped blanket coverages. Each building, in the event of an occurrence, now stands alone. The named storm deductible of our 1% has disappeared. The best we could get was a 2% deductible. Construction costs have risen dramatically in the last year. This results in us taking a higher level of core insurance to cover replacement costs in today’s environment. In the past we had blanket coverage and we took a core insurance amount for property that was 85% of the appraisal replacement cost of 2020, knowing that our policy allowed us to purchase an additional 15% if an event occurred. 

To meet the requirement in the master deed and because of the loss of the blanket coverage the board has insured the property of the HOA at the 2020 full appraisal cost (as required) and kept the option of purchasing 15% more coverage of an asset, if needed. As an example, a 2 car garage building increased in insurance coverage for replacement cost from $797,000 plus 15% ($916,000) to a total insured value of $1,055,000 with the additional 15% buy in.

The resulting costs for the HLV is we utilized the extra $3,000 of the assessment collected and also used $8,800 of the insurance deductible saving account. Our annual claim free rebate from the insurance broker will replenish about $4,800 back to this account when received in June.

In speaking with 3 different insurance broker contacts of mine all agreed that this is not just a one-year issue. We are in a insurance cycle that will last a few years, as it has in the past cycles. Everyone is forewarned.

Again this year Wayne Trent was a huge help to myself and the board. We are so thankful for his knowledge and thinking on these matters. Thank you Wayne.

If you have any questions just reach out to me.

Tom

Treasurer