CAI-NJ June 2022 Community Trends

The Top Five – FAQs for a COMMUNITY ASSOCIATION INSURANCE PROFESSIONAL

By Cheryl Rhine, CIC, CIRMS, EBP, Vice President, USI Insurance Service

O ne of the things I enjoy most about my pro fession is getting to help managers, boards and residents have a better understanding of Community Associations insurance coverage. Boards have a responsibility to protect the investment of the owners in a community and placing the proper insurance is an integral part. Additionally, residents in any community should have a clear understating of the relationship between how their own personal policy correlates with the Association master policy. This leads me in to the first question: Q. Why do I need an HO6 policy if my association covers the buildings and units? A. This question refers to communities where there is responsibility for the Association to include coverage for the residential buildings including the units. There are three

ways that a master policy for an association will provide coverage: 1. Bare Walls or Studs In 2. Single Entity (Original Specs) 3. All-In. When your community is providing coverage on resi dential buildings, you will need to have a personal policy known as an HO6 policy or condominium owners policy. Your HO6 policy will need to have some “building” cover age provided for you. If the association’s master policy is “Bare Walls” or “Studs In”, then the building portion of the policy would need to include a higher limit as you will be responsible for interior portions of the unit such as cabinets and flooring. CONT I NU E S ON PAGE 32

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