LODGES AT SNAKE CREEK HOA
March 1, 2023 INSURANCE INFORMATION NOTICE
You are hereby notified that The Lodges at Snake Creek HOA is increasing the insurance deductible of its building coverage from $10,000 to $25,000. This change will take effect on April 1, 2023.
We realize many owners may have damages from ice dam events this winter and this change will not affect any claims reported before April 1, 2023. The HOA feels this is an important decision that will limit numerous, smaller claims against the HOA’s policy that could lead to cancellation or much higher rates. After speaking with the HOA’s insurance agent, he feels this change will likely equate to less than a $50/year increase for most homeowners.
Owners have asked many questions about the HOA’s policy and how it works with your personal policy, so here is some information on HOA insurance in Utah:
UTAH HOA INSURANCE LAW
Senate Bill SB167 was passed in 2011 by the Utah legislature which governs HOA insurance requirements, and the bill specifies who is responsible if an insurable claim occurs.
The bill requires the HOA to have an insurance policy that completely covers the cost to rebuild the homes in the association. This policy also covers attached fixtures such as drywall, light fixtures, heating and plumbing fixtures, and cabinets in all units. The HOA master policy is the primary coverage in the event of a loss, but you or your personal insurance policy needs to cover the amount of the HOA’s deductible first. The HOA’s policy does NOT cover the homeowner’s personal property contents in the home or any liability within the home.
WHAT DO I TELL MY INSURANCE AGENT?
The HOA strongly encourages all homeowners to speak with their agent and make sure they have proper coverages. You may need to make adjustments to your individual policy because of these laws, because of the HOA’s deductible, or because you are fully covering the value of your home. Here are some of the coverages you may need:
· Ho6 policy with at least $25,000 in dwelling coverage to cover the HOA’s deductible.
· Coverage for your personal contents.
· Personal liability protection.
· Loss of use/additional living expense.
· Loss assessment coverage.
· Loss of rents (if your unit is a rental).
· Coverage for specific items, such as fine arts, jewelry, valuable items.
I HAVE DAMAGES IN MY HOME. WHO IS GOING TO PAY FOR IT?
SB167 states the responsibility to cover repairs belongs to the owner of the unit, regardless of what or who caused the damage.
For example: A leak occurs in a bathroom sink in an upstairs unit. The leak causes no damages to the upstairs bathroom, and then water enters the unit below them and causes damage to the ceiling of that unit. The total damage in this example is below the $25,000 deductible amount of the HOA’s insurance policy.
According to SB167, each homeowner is responsible to fix the damage to their own unit, and in addition, the upstairs homeowner is responsible to fix the leak.
Even though the leak occurred in the upstairs unit, the upstairs unit owner is only responsible for fixing the leak and for the damages to the upstairs unit. The downstairs unit owner is responsible for the repairs to that unit’s ceiling.
In this example, if the damages were $40,000 in the lower unit, the lower unit’s insurance would cover the first $25,000 and then the HOA’s policy would cover anything above that, or $15,000.
If there are multiple units with damages, the unit owners are responsible for an amount calculated by applying the unit damage percentage for that unit to the amount of the deductible under the HOA’s master insurance policy.
UNIT OWNER CHECKLIST
In the event of damage to a unit, the unit owner should contact K&K Property Management and then contact their own insurance company. If damages appear to be getting close to the HOA’s deductible, K&K will then contact the HOA’s master insurance company.
The HOA will work to repair any common areas that are causing damages or contact neighboring units that may be causing those damages.