Tracking HO-6

1. Tracking HO-6 How to get and maintain the info Presented By: Sue Savio, President Insurance Associates, Inc. August 2014

2. 514B-143 (g) (g)The board, with the vote or written consent of a majority of the owners, may require unit owners to obtain reasonable types and levels of insurance.The liability of a unit owner shall include but not be limited to the deductible of the owner whose unit was damaged, any damage not covered by insurance required by this subsection, as well as the decorating, painting, wall and floor coverings, trim, appliances, equipment, and other furnishings. If the unit owner does not purchase or produce evidence of insurance requested by the board, the directors may, in good faith, purchase the insurance coverage and charge the reasonable premium cost back to the unit owner. In no event is the association or board liable to any person either with regard to the failure of a unit owner to purchase insurance or a decision by the board not to purchase the insurance for the owner, or with regard to the timing of its purchase of the insurance or the amounts or types of coverages obtained.

3. Reasonable types and levels • What is reasonable? • Depends on the master policy with the AOUO deductible playing a large part. • Depends on what the units came with • Cabinets and Flooring? • Bare walls and floors? • Depends on the use of your building: • Commercial • Residential • Mixed • Hotel, etc.

4. How to collect it • Once the limits are determined a letter needs to go to all unit owners. • Mandatory HO6 Coverage ‐ Please Respond by [Due Date] • We at Insurance Associates would like to introduce ourselves as the agent for ABC Condo master insurance policy. As you may be aware, ABC Condo now requires that each owner have homeowners insurance. Here are the minimum limits required by your Association: • Dwelling (upgrades & AOAO deductible): $10,000 • Liability: $300,000 • Contents: $20,000 • Loss Assessment: $5,000

5. How to get the proof • We recommend that you discuss these limits with your insurance agent, since these are the minimum requirements and may not reflect the actual coverage you need. • To satisfy this new requirement, we have been tasked with securing proof of your homeowners insurance policy for your unit at ABC Condo. This can consist of either the declarations page of your policy or a certificate of insurance. • Your insurance agent will be able to provide this information to us directly if you send them this letter and request their assistance

6. How to submit the proof • Please submit proof of insurance before [Due Date]. Submissions can be made by fax, email, or regular mail to the attention of • Fax Number • Email Address • Mailing Address

7. How to submit proof on renewal • Because ABC condo requires continuous coverage, we will need proof of insurance on an annual basis. • To avoid annual requests, you may consider adding ABC condo as a "certificate holder" supplying our mailing address above. • Your carrier will then automatically notify us when your policy is renewed each year. Please discuss this option with your insurance agent

8. Hammer clause • If you do not purchase your own policy, or submit proof of existing coverage by [Due Date], the Board of Directors may/shallpurchase a policy on your behalf, and your association’s property management company will place this charge on your account.

9. How to maintain the info • We had a computer program designed but if you do not have one then an excel spreadsheet is probably the easiest way • Letters need to be sent out about 2 weeks before the expiration date of an owners policy to remind them to send in their policy.

10. Why care about an owners policy? • Master policy: as originally built • HO-6 • Upgrades • Contents • AOUO deductible • Personal Liability • Claims • Water Losses • Fires • Liability

11. Conclusion • Work with your managing agent to determine the best way for you to collect the HO-6 info • Work with your insurance agent to determine the correct limits for your Association • Explain to your owners why the need for this coverage and understand you are protecting your owners from a financial disaster by requiring the HO-6