I recently attended a conference which had special sessions for insurance professionals from the Common Interest Development (CID) industry. We all discussed the current insurance crisis, which is hitting California, as well as some other states, quite hard. As you (hopefully) know, certain types of insurance are required by state statute in California, as well as in most other states. So, when someone stated “Insurance is a privilege not a right,” there was an audible gasp from most attendees in the room.

After some thoughtful discussion, we all realized that it is a true statement. Just because it is required by your governing documents or state law, that doesn’t mean common interest developments are guaranteed coverage. In fact, more and more we are seeing underwriters ask very specific questions and require additional documentation before making quoting decisions, and declining to provide quotes unless those requests are responded to to their satisfaction.
As an example, condo associations built in the 70’s or before must provide documentation (and sometimes photographic evidence) that electrical panels have been replaced. Stating “those are not HOA responsibility” does not matter to the underwriters. The panels are within the buildings being insured; therefore proof of replacement must be provided.

Similarly, communities that have had liability claims (including D&O liability) are having difficulty finding coverage with preferred, admitted carriers. These carriers are choosing not to offer this privilege to communities whose loss histories have a “temperature.”

Community managers and boards of directors must quickly understand that the privilege of having insurance now requires more than just paying a premium. It requires working with your insurance broker to provide all necessary documentation in order to show insurance carriers your community deserves that privilege.

Terri Guest, CIRMS, CMCA, EBP is Senior Sales & Marketing Representative for Northern California at Berg Insurance Agency and may be reached at Terri@BergInsurance.com.