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elements. Older railings may create a higher insurance risk for associations if not replaced with current code compliant styles.


If your association has not completed its SB 326 raised deck inspection, it is potentially at risk. Some Orange County associations that either have conducted or are in the process of conducting the elevated deck and walkway inspections have found problems requiring deck replacement. Associations that are hoping for January 2025 deadline extensions working through the state legislature are operating at increased risk by delaying these inspections signed into law in August 2019.


Does Your Association Participate in Insurer Loss Control Inspections?


Standard insurance companies want to reduce the risk of loss to their insured customers. Most either provide or conduct loss control inspections of properties to determine the level of risk to the insurer and reinsurer. Associations that work with their insurer in reviewing and correcting issues that can increase the risk of loss have a greater potential to retain insurance at reasonable risk-based rates. To demonstrate an association’s determination to reduce risk, a plan of action must be developed to correct deficiencies, vulnerabilities, and concerns noted in the inspection. A funding plan to pay for the corrections must also be developed. These plans should be shared with insurers and association members and be implemented as soon as possible to reduce the probability of non-renewal and having to obtain high risk, high-cost insurance policies.


Closely related to loss control is the association’s claim history. Does your association have a walls-in improvements and betterments policy where the association members and the insurance company cover all the losses inside a condo unit including upgrades? Do your CC&Rs allow a bare walls policy that shifts the burden of an exclusive use area repair to the unit owner and their HO6 insurance policy? Claims history directly impacts potential future loss considerations for insurability.


Does Your Association Have a Water Intrusion and Mold Treatment Policy?


Your association CC&Rs may spell out some responsibilities for water intrusion and damage in condominiums and condo-


like connected townhouse style single family homes. However, an association’s responsibility, the unit owner’s responsibility, and the requirements to repair water damage and remediate mold growth need to be spelled out in a water intrusion policy. A well written policy will define responsibility, inspections, reporting, mitigating, precautions, insurance, and the right to shut off water. Association legal counsel should be contacted to develop the policy for an association. The policy must be sent to all owners for a 28-day review. This not only ensures all members know the policy, procedures, and actions required when a water leak does occur, but gives them an opportunity for clarification requests or additions to the policy. Association members should provide the community water intrusion policy to their personal property insurer that provides their HO6 condo insurance.


What Other Hazards to Insurability Are Lurking in Your Community?


These include: 1. Underinsured plants & outdoor property


including pool furniture


2. Plants and mulch that increase fire risk located next to buildings


3. Tripping hazards from unrepaired sidewalks and pavers 4. Non-fire hardened structures 5. Directors who act outside their scope of authority


To maintain your association’s insurability, contact your agent or broker about recommendations tailored to your community’s insurability needs.


—Richard Williamson is Treasurer for the San Lorenzo Community and Secretary for the Stadium Lofts Community associations. He is an active member of the Chapter’s Publication and Education Committees. In his career, he served as a program manager and development planner for the U.S. Defense Department.


—Patrick Prendiville started Prendiville Insurance Agency in 1988. Patrick is a Community Insurance Risk Management Specialist and a Past President of CAI-OC.


replacement


“Obtain Legal Counsel review of proposed contracts before signing.”


28 September | October 2024


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