We had a great discussion at our HOA University in April. We discussed the new Utah laws governing insurance requirements and reserves. The new laws are summarized in the handout here: HOA University – April 2011 Handout, but the highlights of our discussion were:
1. condominium owners associations are required by a new law to insure all permanent improvements, including those that are within a unit,
2. for claims against the association’s master policy which are associated with a particular unit, the association can require that unit owner to pay the deductible if a notice is first sent to all unit owners stating they will be responsible for the deductible on the association’s master policy. Note that the unit owner can generally obtain insurance which will pay the association’s master policy deductible.
3. Utah now requires all homeowners associations to have property and liability insurance coverage for their common areas, (this was not required before in non-condominium HOAs, like single family home PUDs, or non-condo townhomes, but is now by this law),
4. all HOAs with attached housing (usually called townhomes) have the same requirements for insurance as condominiums (as mentioned above), unless the HOA was established before January 1, 2012, and the CC&Rs already require each lot owner to insure their own dwelling unit.
Curtis G. Kimble