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By law (NRS 116.3113, *statute description below) the HOA insurance policy is primary whenever there is a loss in your condominium. Should you suffer a loss in your condominium, you should immediately contact your HOA Community Manager, to report the loss. Many homeowners do not know that their HOA insurance is primary. Equally, many Community Managers, whether they are aware of the law or not, will tell the homeowner to contact their own homeowner’s insurance company. This is simply incorrect. The HOA is required by law to place a claim with their insurance company. One caveat to this is if the HOA’s deductible is higher than the total amount of the loss. This is where a Public Insurance Adjuster can be helpful by interpreting the policy and determining the amount of damage caused by water or fire.
As a homeowner of a condominium, you are considered an additionally named insured on the HOA’s policy and that policy’s coverage extends to you, whether you have additional homeowner’s insurance or not.
When you purchased the condominium, you were provided a copy of the HOA’s CC&Rs (Covenants, Conditions and Restrictions). Within the CC&Rs, it will define the type of insurance coverage the HOA is required to carry. As a homeowner, you are entitled to request a copy of the HOA’s insurance policy, since as an owner, you are an additionally named insured on the HOA’s policy. That policy will indicate the coverages the HOA policy contains. Most HOA condominium policies cover, at a minimum, water damage and fire. Some HOA policies will have a higher deductible than others, depending on the age of the building and how the CC&Rs were originally written.
Many homeowners do not realize that a multi-family building, such as a condominium complex, is considered a commercial building and additional rules apply to commercial buildings.
If you have a water or fire loss at your condominium, don’t try and deal with it on your own. Contact a local Public Adjuster to help guide you through the process of dealing with your loss as many rules apply that your HOA, and in many cases, your own homeowner’s insurance adjuster is not aware of, which will delay and/or prevent you from getting all the insurance coverage you are afforded.
Recently, I was hired by two separate individuals, in separate HOA communities, where they had a loss in their condominium. In these cases, they contacted the HOA Community Manager, who told them they had to contact their own insurance company to file the claim, and that the HOA didn’t have anything to do with it nor would they be filing a claim.
In these two instances, I contacted the HOA and was given the run around as to why they could not or would not place a claim. I explained to them, based on the law, they were required to file a claim and then let them know should they choose to not file the claim, I would open the claim for them. Yes, a Public Adjuster can open a claim for a client or, in this case, an HOA.
Unfortunately, this scenario happens all too often, and most homeowners are none the wiser and may even get denied by their own insurance company, when the HOA’s insurance should be providing the coverage. I have even had insurance agents tell me that a claim did not need to be filed through the HOA.
While we all believe the people such as HOA Community Managers, Insurance Adjusters and Insurance Agents should be experts in their field and are there to help you through the process, please do not be fooled, as this is not the case in most instances, and why you should consider consulting with a Public Insurance Adjuster.
NRS 116.3113  Insurance: General requirements.
1.  Commencing not later than the time of the first conveyance of a unit to a person other than a declarant, the association shall maintain, to the extent reasonably available and subject to reasonable deductibles, all of the following:
(a) Property insurance on the common elements and, in a planned community, also on property that must become common elements, insuring against risks of direct physical loss commonly insured against, which insurance, after application of any deductibles, must be not less than 80 percent of the actual cash value of the insured property at the time the insurance is purchased and at each renewal date, exclusive of land, excavations, foundations and other items normally excluded from property policies.
(b) Commercial general liability insurance, including insurance for medical payments, in an amount determined by the executive board but not less than any amount specified in the declaration, covering all occurrences commonly insured against for bodily injury and property damage arising out of or in connection with the use, ownership, or maintenance of the common elements and, in cooperatives, also of all units.
(c) Crime insurance which includes coverage for dishonest acts by members of the executive board and the officers, employees, agents, directors and volunteers of the association and which extends coverage to any business entity that acts as the community manager of the association and the employees of that entity. Such insurance may not contain a conviction requirement, and the minimum amount of the policy must be not less than an amount equal to 3 months of aggregate assessments on all units plus reserve funds or $5,000,000, whichever is less.
(d) Directors and officers insurance that is a nonprofit organization errors and omissions policy in a minimum aggregate amount of not less than $1,000,000 naming the association as the owner and the named insured. The coverage must extend to the members of the executive board and the officers, employees, agents, directors and volunteers of the association and to the community manager of the association and any employees thereof while acting as agents as insured persons under the policy terms. Coverage must be subject to the terms listed in the declaration.
2.  In the case of a building that contains units divided by horizontal boundaries described in the declaration, or vertical boundaries that comprise common walls between units, the insurance maintained under paragraph (a) of subsection 1, to the extent reasonably available, must include the units, but need not include improvements and betterments installed by units’ owners.
3.  If the insurance described in subsections 1 and 2 is not reasonably available, the association promptly shall cause notice of that fact to be given to all units’ owners. The declaration may require the association to carry any other insurance, and the association may carry any other insurance it considers appropriate to protect the association or the units’ owners.
4.  An insurance policy issued to the association does not prevent a unit’s owner from obtaining insurance for the unit’s owner’s own benefit.