TownhomesofBigtreeHomeownerInsuranceGuide

Insurance Q&A

Why do I have to buy homeowner’s insurance?

Each of us owns the portion of the building weoccupy and a small sliver of land on two sides. It’sour property and we assume the risk of loss in caseof damage or destruction. The purchase ofinsurance is recommended but not mandatory.

Why can’t the Association buy insurance on mybehalf?

We are a homeowner’s association. The Associationcould not purchase insurance for the benefit ofhomeowners, even if we wanted to. Nobody wouldsell it to us as the Association does not have aninsurable interest in the homeowner’s real orpersonal property.

Why did the Association buy insurance on thebuildings before?

It was a mistake that was not corrected untilOctober 1, 2013. Previously, the insurance industrythought we were organized as a condominiumassociation. We were paying an annual premium ofapproximately $140,000.

What is the difference between “Maintenance”and “Insurance”?

“Maintenance” is the repair of property that issubject to ordinary wear and tear. It does not meanrepairs associated with accidental physical damageto same property. If you have a car, think ofchanging the oil or the brakes — that ismaintenance. If the same car is involved in anaccident, the repairs would be covered byinsurance. The same applies to our buildings.

What happens if I don’t buy insurance?

Without insurance, each homeowner would beresponsible to bear 100% of the costs to repair orreplace property damaged in a fire or by someother cause.

What happens if I don’t have enough money tomake my own repairs?

Your property and that of your neighbors couldsuffer diminished economic value. If it is nothabitable, you might have to borrow the moneyor sell it to someone else who would make theneeded repairs. If the repairs are not made on atimely basis, your neighbors or the Associationcould ask the COJ to condemn the property andsell it at auction.

What happens if a loss damages two adjoiningunits and only one of the homeowners isproperly insured?

The homeowner with insurance would have thedamage repaired. The insurer would also pay thecosts required to safeguard the insured property,if practical, from potential future damage causedby the failure of the neighbor to make neededrepairs to the uninsured unit. If damage to theuninsured unit was so extensive as to prohibittemporary repairs, it’s possible the insurer woulddeclare the insured property to be a constructivetotal loss and make a buyout offer.

How can I make sure all the homeowners in mybuilding are properly insured?

The only practical solution is to meet with yourneighbors and compare the insurance that eachone purchases.

PREMIUMSBasicPerils=$814Hurricane=$314FederalFlood=$650TOTALPREMIUM=$1,780

Dwelling - The building structure and anything permanentlyattached. Examples: roof, walls, floors (including wall-to-wallcarpeting), stairways, bath and kitchen cabinets, piping andplumbing fixtures, electrical wiring, ducting and the building’sfoundation.

Dwelling Extension - Any structure outside the Dwelling that isseparated by clear space, including structures connected to theDwelling by a fence or utility connection. Examples: our patios,gates, fences and built in storage areas; external HVAC devices,propane tanks, water softeners, etc.

Personal Property - Virtually any tangible property owned or usedthat is not included in the coverage for Dwelling or DwellingExtension; subject to specific policy limitations and exclusions.Examples of limitations include: money & securities, jewelry, silveror goldware, business property, firearms, etc. Examples ofexclusions include: animals, motor vehicles, watercraft, aircraft,etc.

Loss of Use - the Actual Loss Sustained for temporary livingexpenses when insured damage to the unit causes it not to behabitable. Remember: you must continue to pay monthlyassessments to the Association.

Personal Liability - Your legal liability for bodily injury to thirdparties or loss or damage of the property of others arising outof the use and occupancy of your unit.

Medical Payments - Voluntary payments for first aid to avoidPersonal Liability claims.

“Hurricane” Coverage - Insures damage to your propertycaused by a Named Storm as designated by the NationalHurricane Center (NOAA), usually requiring a separatepremiumand a higher deductible.

Flood Coverage - Insures damage to your property caused byrising water, including ground water, storm surge and theoverflow of any body of water; available only through the NationalFlood Insurance Program (FEMA) and subject to a separatepremiumand higher deductible.

Back-Up of Sewer or Drain - Extension of coverage under ahomeowner’s policy to insure damage to the inside of yourproperty caused by the back up of water or sewers from a sourceoutside the dwelling.

Florida Catastrophic Ground Cover Collapse - Extension ofcoverage under a homeowner’s policy to insure structural damageto an insured building caused by geological activity, such as asinkhole.

Tenant Homeowners or Renter’s Insurance - A policy that insuresthe Personal Property and Personal Liability of a tenant or renter.

GLOSSARY

What happens if a tree falls on my home or mycar?

Assuming you had the correct insurance, thehomeowners or motor vehicle policy would pay torepair resultant damage, net of applicabledeductibles. It would also pay the cost to removeand dispose of the tree debris, subject to policylimitations — normally a sublimit of $500. Anycost in addition to the sublimit would be theresponsibility of the owner.

How do I know if my insurance is adequate?

Insurance is a highly technical, legal contract. It’simperative that you trust your agent or directwriter and listen to his/her advice. You shouldreview the adequacy of your insurance each year.Our buildings were constructed of materials thatare subject to limited availability and higher thanaverage costs.

How do I save money on my insurance?

The key is to decide exactly what coverage isappropriate for your risk tolerance and ability toassume risk — in respect of coverage, limits anddeductibles. There is some competition in thehomeowner’s insurance market but not as muchas you might think. It might also work to yourbenefit to consolidate all the insurance youpurchase with one insurer, if you obtain amultiline discount. It’s like everything else, youget what you pay for.

How do I get aWindMitigation Discount?

We have copies of roof mitigation reports forroofs replaced in 2016. We do not have themfrom roofs replaced in earlier years. If you can’tobtain them from the owner at the time the roofwas replaced, you or your insurer may have tohire an inspector to create a new report.

TownhomesofBigtreeHomeownerInsuranceGuide(continued)

Preparedby:WilliamBJasperonNovember25,2016.Informationorexplanationscontainedhereinareprovidedona“bestefforts”basisanddoesnotrepresentprofessionalorauthoritativeadvice.