Proactive Measures to Safeguard HOA Communities


To reduce risk, maintain property values, and ensure


accessibility, boards must take proactive steps. The following strategies provide a roadmap for better long-term planning and operational success:


• Regular Property Inspections Hire qualifi ed inspectors to regularly assess building systems,


exterior components, and common areas.


Independent third-party assessments often catch issues early before they escalate.


• Comprehensive Maintenance Planning Use inspection fi ndings to build a multi-year maintenance plan. Prioritize high-risk issues and stagger less urgent projects to avoid overwhelming budget increases.


• Bolstering Reserve Funds Associations should commission updated reserve studies every year, including an update with on-site inspection every three years, and adjust contributions accordingly. Following the reserve funding recommendation provided by the reserve analyst will help reduce the potential for future special assessments. Ensure that all reserve components are accurately listed and accounted for in the reserve study.


• Collaborating with Experienced Insurance Brokers Partner with brokers who specialize


in community


associations. They understand the nuances of HOA risk and can advocate on your behalf during underwriting.


• Prioritizing High-Risk Repairs Immediate attention should go to life safety issues like faulty wiring, dry rot,


loose railings, and trip hazards. Prompt repair of these items reduces the risk of claims.


• Educating Homeowners on Maintenance Needs Host annual meetings or send quarterly newsletters that explain key projects, reserve funding rationale, and the importance of preventative work.


• Exploring Alternative Funding Options For major projects, investigate HOA-specifi c loan programs or grant opportunities. A well-structured loan can help avoid burdensome special assessments.


• Implementing Preventative Maintenance Programs Establish monthly, quarterly, and annual maintenance tasks for key building systems. Preventative efforts reduce the frequency and severity of breakdowns.


• Leveraging Technology for Maintenance Management Tools like maintenance tracking software or app-based work order systems help streamline repairs, reduce delays, and document the HOA’s efforts.


For more detailed information on how unsafe, failing electrical panels could zap your insurance coverage, please see page 23 of the March/April 2025 issue of OC View.


Real-Life Consequences of Deferred Maintenance


Consider the case of an Orange County HOA that failed to upgrade aging electrical panels fl agged by inspectors. After two small electrical fi res and growing concern from residents, the community was dropped by its insurance provider. The board was forced into a last-minute scramble to fi nd coverage, ultimately accepting a new policy at more than seven times the previous cost and with fewer protections. Once the new panels were installed, the HOA eventually secured better coverage, but only after months of stress and a major hit to the budget. This case illustrates how ignoring deferred maintenance not only puts lives and property at risk, but it can also severely limit insurability and destabilize fi nancial planning.


The Cost of Inaction is Too High


HOAs that wait too long to address known maintenance issues are likely to pay more, in repairs, liability claims, and insurance premiums. In worst-case scenarios, they may become uninsurable, threatening the very


viability of the


community. By investing in proactive inspections, planning, and repairs today, HOA boards can ensure their communities remain safe, marketable, and fi nancially sound for decades to come. The time to act isn’t when a problem becomes unmanageable, it’s now.


www.caioc.org


21


How Unsafe, Failing Electrical Panels Could Zap Your HOA’s Insurance Coverage!


Jamie Hackwith, CMCA, AMS, PCAM, Agent-Broker, Prendiville Insurance Agency, and Don Holly, President, Fullerton Electric Co.


It’s time for associations to talk about something that might not be the most glamorous topic but is super important— outdated electrical panels. Although it sounds about as exciting as watching paint dry, hang in there because there’s a good reason why this is worth your attention. For clarity, some people may refer to an electrical load center as an electrical panel, a fuse box, or a breaker box. For this article, they are all the same item. Certain brands require urgent replacement to prevent fires and loss of association insurance because of increasing risk of fires.


Insurance agencies and electricians absolutely understand the juggling act community associations face in condominiums and attached buildings with unsafe electrical panels. But here’s the kicker—what used to be just recommendations from a Loss Control Survey are now more like directives. Ignore them, and you might be risking your current association insurance coverage even if the electrical panels are a unit owner’s responsibility. The stakes for a catastrophic loss have gone up, and that’s why it’s more important than ever to focus on these issues.


The Peril of Unsafe Electrical Panels


These panels aren’t just old relics sitting quietly in your community’s buildings; they’re ticking time bombs. Panels like Zinsco, Federal Pacific, Sylvania, Challenger, and sometimes Murray have been flagged as major fire and electrocution hazards. If your community has any of these, it’s no longer just a suggestion to replace them – it’s now becoming an insurance coverage requirement. Ignore this, and you could face a non-renewal notice or cancellation of your insurance policy.


What’s the issue with these Electrical Panels? Here’s why these specific panels are causing such a stir:


• Zinsco Electrical Panels were popular from the 1950s through the 1970s. Some panels (built after 1973) will be branded as “GTE-Sylvania” yet still contain the same problematic components.


They are notorious for not


tripping – allowing electricity to continue to flow when it should NOT during an overcurrent, short circuit, or power surge due to aluminum alloy bus bars and loose breaker connections. The effects of this over-heating at the connection point would cause several issues ranging from either circuit breaker nuisance tripping during low power consumption or not tripping during an over-current event leading to circuit breaker failureand burned-up wire connections to full panel meltdowns and fires depending on the severity of the issue. Zinsco production ceased in the 1980s when the company was rebranded to Challenger.


• Federal Pacific / Stab-Lok Breaker Panels: Similar to Zinsco, these panels have a high failure rate. Federal Pacific electrical panels were popular from the 1950s through the 1980s. They were installed in millions of homes and businesses


throughout the United States.


Commonly, Federal Pacific panels will be branded “Stab- Lok.” This refers to the connection method of the breakers to their respective panel bus plug-in point. The breaker would be equipped with tabs that would slot into a keyed hole in the panel’s main bus. The main issue with these breakers is they are notorious for not tripping


Continued on next page www.caioc.org 23


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