California has some of the largest homeowner associations in the country. That being said members of the HOA deal with millions of dollars on a monthly basis.
Unfortunately fraud and theft have become extremely rampant in the past few years (20 BILLION PER YEAR) leading to the loss of hundreds of thousands and even millions for some California HOA’s.
Board members have been caught manipulating checkbooks and destroying records. Let’s go over a few ways your association can avoid this type of theft.
Check Signatures – Every check that goes out to a contractor or anyone else for that matter should always be signed by two board members. Some fidelity bond and crime insurance carriers won’t even cover you from a loss unless checks are signed in this manner.
Blank Checks – Association board members should never sign a check that has not been completely filled out. I’ve personally had clients that were victims to fraudulent checks due to this simple mistake.
Internal Association Systems – EVERY association no matter how small should have systems in place that ensure security and honesty. Many HOA’s have one person that takes care of the accounting, balances the checkbook, writes checks, and looks at invoices. If one person handles all financial matters there is no to ensure that every dollar is its correct place.
Make sure you’re properly protected – Every homeowners association in California needs a fidelity or crime policy. We can only do so much to prevent theft, even with refined systems in place theft can still take place.
Get in touch with one of our California HOA Insurance brokers today. We can go over your current policy to ensure you have proper coverage and re-quote your insurance policy with multiple carriers.
Obviously “best” is relative to your specific association since no two are exactly the same. What would you consider the “best” coverage”? Homeowner associations all over California pay a pretty penny to keep the association protected if something were to go wrong. Wouldn’t you agree that the best insurance coverage is the type of coverage that comes in and takes care of you when you needed it the most? Of course you would! In this post we’ll go over a few very important coverages that are often overlooked due to “the lowest price wins” mentality.
Now obviously no one wants to overpay for insurance and we’re not insinuating that you do, especially when policy premiums can range from $30,000-$100,000. Ultimately you want a policy that takes care of you when something happens. Sewer water backup coverage, ordinance or law coverage, and actual cash value vs guaranteed replacement cost are just a few aspects of the policy that need to be considered when shopping for HOA insurance.
Sewer water backup coverage protects the HOA from sewage that could easily come up through the sinks and toilets. This type of loss happens very often, especially when work is being done to sewage lines in the area. thousands of gallons of sewage waste can easily cause millions of dollars of damage, especially in multi story associations where one unit can cause damage to those around and below it.
Ordinance or law coverage provides financial help to associations that were built before new city codes and ordinances were put into place. Codes for fire sprinklers, windows, roofing, framing, etc. are constantly evolving to make our associations an even safer place to live. Unfortunately these required upgrades are not covered under a standard homeowners association insurance policy. The ordinance or law coverage endorsement needs to be added to the policy for this type of protection to kick in. Associations built before the year 2000 could have hundreds of thousands of dollars worth of required building code upgrades.
When shopping for an HOA insurance policy you may be presented with two different types of property coverage: actual cash value (this is the replacement cost minus depreciation), and guaranteed replacement cost (this type of policy will guarantee to rebuild your association no matter what the cost). In the event of a disaster the cost of construction and contractors can significantly rise due to supply and demand. The cost to rebuild your association could be hundreds of thousands of dollars above the agreed value. Guaranteed replacement cost is always the best option.
Get in touch with one of our California homeowners association insurance brokers. We have access to multiple carriers that offer quality policies containing the above coverage and much more. You can call us, e-mail us, or just fill out the form to the right.
Just about every day we use our sinks, toilets, and water drains for basic needs. Can you imagine what would happen if the grease, waste, and sewage we flush came right back up in large amounts without notice?
Unfortunately water sewage backup happends to homeowners and HOA’s all the time. Take Joey Roche, for example, your regular “average Joe” homeowner. His home was violated by litterly 15,000 gallons of sewage waste that overflowed his drains, soaking his carpet, walls, furniture, and property! To make matters worse, the coverage he had was “practically nothing” as he puts it. Could you imagine how you would feel if your home was flooded with sewage waste and you didn’t have the funds to have it removed? HORRIBLE!
Do you have sewer water backup coverage? It’s usually an endorsement that can easiliy be added to the policy. Most insurance agents though will leave this coverage out (1) because most property owners aren’t aware of the issue and (2) because it’ll usually add extra premium. Ultimately any professional insurance agent will at least offer the coverage and give the property owner a choice of including/rejecting the coverage.
Ask yourself: “Do I want to be covered if my home is flooded with 15,000 gallons of raw sewage and waste?” – Of course you do! Call Andrew at 949-540-1440, email him at Andrew@CaliforniaQualityInsurance.com, or just fill out the short form to the right. He insures HOA’s all over California and would love a chance to offer you only the best in protection.
California homeowner associations are required to carry a sufficient amount of property insurance coverage, and most HOA’s do. Unfortunately though many HOA’s I’ve come across fail to include an extremely important coverage endorsement, building Ordinance or Law coverage.
What is HOA Ordinance or Law coverage? In simple terms, ordinance or law provides the funds needed for HOA demolition, reconstruction, and building code upgrades.
Why do I need it? As the years pass building codes rapidly change. Example, did you know that since January 1st, 2011 California code requires fire sprinklers in both single family dwellings and apartment complexes? Starting January 1st 2014 California buildings are now required to build according to new energy efficient standards. Meaning upgrades like dual pane windows, top of the line insulation, and all kinds of high tech materials are necessary. THESE ARE JUST 2 CODES!
Look UP for a second… No I don’t mean at the photo, I mean up at your ceiling. Do you see any fire sprinklers? Was your home built with the latest and greatest expensive high tech material. If not, YOUR responsible for these completed upgrades in the event of a disaster. Are you able to come up with tens of thousands of dollars out of pocket? Most building owners will say no.
I’ve personally placed apartment buildings, HOA’s, and homeowners into quality insurance policies that provide Building Ordinance or Law coverage. Call me right now at 949-777-5027, email me at Andrew@CaliforniaQualityInsurance.com, or just fill out the short form to the right.