HOAleader.com - Tip of the Week - April 18, 2025
Published: Fri, 04/18/25
Updated: Tue, 04/22/25
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HOAleader.com - Tip of the Week - April 18, 2025
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In this week's tip, we lend a hand to a reader who responded to our request for information on the insurance challenges they're facing.
One reader wrote in and said: "We've had two incidences of water damage in our 17-owner HOA. One was egregious mold, put aside knowingly for well over a year. We're in Pittsburgh, and this case cost $40,000. The owner put in $5,000, and the association did, too [it sounds like there was a $10,000 deductible].
We pay $11,500 per year now, and that will increase by $3,500 soon. This is a condo for 55-and-older residents with a mean age of 83 on fixed incomes. As VP of the board, what can be done to decrease liability or at least our premiums? We have a three-year wait time for this case to be erased."
Our experts see this happening all over, and they have a few suggestions.
There's no question that many communities like this reader's are in a terrible bind. "It's a mixed bag," says Brad van Rooyen, CPMS, the president of Florida-based Folio Association Management, which oversees more than 325 associations throughout the state. "You have insurance to protect you for things that are unexpected. The challenge is that, when you make a claim, your costs are going to go up.
“But you also don't not want to make a claim on your insurance because what if you start ripping out the walls and there's further damage?” asks van Rooyen. "Then you're trying to self-fund the repairs, and owners will have to pay a special assessment. I genuinely feel their pain. Even when this reader's three-year wait period ends, insurance costs will have increased again. I don't think anyone expects insurance costs to decrease."
Some boards are discussing self-insurance, where they don't pay for insurance but say they're setting aside enough money to cover damages that may arise. "I've never seen self-insurance," says van Rooyen. "You have to have millions of dollars to cover the costs of what you might have to pay. Also, think of the resale value of your community. Who wants to buy into a place that has no insurance? And chances are buyers won't be able to get financing for purchases of units in your community."
It's also very unwise to underinsure, he notes. Find out why—and get several concrete ideas that can help you fight insurance spikes in the future—in our new article: https://www.hoaleader.com/members/5079.cfm
Best regards,
Matt Humphrey
President
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Don't Get Soaked: What Your Condo/HOA Needs to Know to About Who Maintains, Repairs, and Pays to Prevent and Clean Up Water Damage
Did you miss our webinar yesterday on how to handle water damage in community associations? If so, you missed a great session! Get a copy of the recording so your entire board can watch on demand. In 60 quick minutes, you'll get the info you need about who maintains, repairs, and pays to prevent and clean up water damage.
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https://www.hoaleader.com/members/When-You-Need-Raise-Your-CondoHOAs-Assessments-But-Youre-Dreading-Complaints.cfm
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An HOA’s Special Assessment Work Has Stalled: Are the Idle Millions Collected Available for Other Projects? [HOAleader.com Video]
In this week’s tip, we answer a reader’s question about whether their board can seemingly rob Peter to pay Paul. By that, we mean, can the board pull money specially assessed for one project to pay for another project while the first project is in litigation?
Click here to read the full article:
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Reasonable or Not: HOA Board Wants EV Charging Stations to Be Invisible
We recently saw a board member complain online about the “unsightly” appearance of electric vehicle charging stations. Their question: “We’ve had some EV charging stations installed without approval for an exterior modification and have unsightly cords outstretched on the ground. I’m thinking they should be installed inside the garage and cords not exposed.”
Click here to read the full article:
https://www.hoaleader.com/members/Reasonable-or-Not-HOA-Board-Wants-EV-Charging-Stations-Be-Invisible.cfm
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