Town Hall Meeting 7/2/22
Estes Park Mountain Fairways
Town Hall Meeting
July 2,2020 10:30AM
Estes Park Baptist Church (2200 Mall Road)
Attendees: Kevin & Debbie Preston, Rick & Claudia Jordan, Susan Novy, Pete and Linda Hogue, John & Sallie Gaddis, Ronnie & Colleen LaRue, Gary Dougherty, Nan Belknap, Jim & Tina Myers, Steve & Anne Poznic, Kathy Beatty, Elen Crone, Becky Velthoen, Tim & Leigh Dawson, Linda Buehring, Max & Yvonne Salfinger, Ed Emmer, Danielle Arnold
MF Property Insurance & Associated Costs
Pete Hogue Reported: These discussions are based on the material sent out in advance to all owners. See attached.
Assessment Review:
All assessments for common and limited common elements and common expenses are split equally between the Owners. Being the insurance premium doesn’t fall under either category, the board will confirm whether that principle applies to payment for insurance premium expenses, as well. (Secretary’s note: The Declarations are now on the website in the main header in a far more legible manner than what the County Clerk has.)
Insurance claim (deductible) assessments are dealt with in the same way as any other maintenance/repair project: it’s the responsibility of HOA to complete the project and the owners will pay equally, less the amount the insurance pays.
Danielle Arnold (our American Family Insurance agent) Reported:
The State of Colorado is reviewing insurance laws as many of the homes in the Marshall Fire were underinsured. This is affecting the whole insurance industry. Consequently, our insurance has increased the replacement cost to $250/square foot from $148/ S.F. to determine our total insured value (the amount we need to insure). By being fully insured, as we are, we have a guaranteed replacement cost (regardless of the actual square footage cost) that would kick in should the entire the development burn down. The 17 million in insurance coverage we have now will easily cover full replacement cost on any smaller fires in the development. The replacement cost is figured on original as-built specifications (as found at the Estes Park Zoning Dept). Any owner improvements are only covered through the owner’s individually purchased condo policy. The two companies will then work out who pays for what. According to the Declarations, should more than 70% of the development be demolished by fire or wind, the HOA has the option to not rebuild the development. Our current deductible is $1000.00 on wind and fire insurance. We’re considering to a $5000 deductible for premium savings.
Hail and Wind is another area of increased insurance. Insurance companies have had to replace so many roofs due to wind and hail that this has caused many insurance companies not to insure HOA’s. Those that do, are changing the way they handle deductibles. There are too many wind & hail claims to keep the premiums low. So now many (including American Family) have split the deductibles into two types of deductibles: fire and wind/hail. Our fire deductible will remain at $1000.00 (unless we increase it to $5000). But we will now also have a wind/hail deductible of 5% the insured value of each building for each separate building.
Example: our smallest duplex with (2) units = 3972 s.f x $250/s.f. replacement value= $993,000 insured building value X 5%= $49,650 deductible for wind and hail on just that one building. Should a wind/hail storm come through and do a total of $60,000 damage on that same building with a $49,650 deductible, a deductible assessment would go out for ($49,500 divided by 30 owners) $1655 per owner that everyone’s personal loss assessment coverage could cover, if you had it. Otherwise, you’d be responsible for your assessment by your own means. Consequently, it is highly recommended that owners get “loss assessment” coverage on their personal condo insurance policy, in addition to your Dwelling coverage and Personal Property coverage. 50K of loss assessment coverage should cover it. (Most policies already cover it, but only a $1,000 deductible. Make sure you have enough.) Loss assessment coverage is cheap and we highly recommend you get it by 2023, as that is when this goes into effect.
The normal situation is that the HOA manages the project to fix the damage. Should the damage be over the deductible amount and a claim made, once the deductible is met, the HOA receives an insurance check that covers the cost minus the deductible. The HOA will meet the deductible by either project reserve and/or by assessing all owners equally for the needed deductible amount – thus having the HOA revenue and expense for the claim being equal.
The only upside to this change of coverage is that the insurance companies won’t be having to replace so many roofs due to hail damage and the premium could possibly come down in time. Don’t hold your breath. The insurance industry is changing daily.
Pete Further Reported:
The insurance premium went from approx. 17K in 2021 to 34K in 2022. During 2022, the board was able to cover the increase of insurance due to monies on hand. Now we’re short in the Operating reserve funds. We’re expecting an increase in dues. Amount is yet to be determined. Stay tuned for the next board meeting.
With HOA small (non- hail/wind) claims, when the damage goes from the exterior to the interior, or vice versa, the HOA needs to determine between owner’s upgrades and HOA’s property to determine what portion the HOA needs to pay for the damage. That portion is split equally amongst the HOA owners (whether by insurance monies, reserves or assessment) and the rest is the owner’s responsibility. This is the reason for you having both Dwelling coverage and Personal Property coverage, as well. ex: a skylight leaks onto a hardwood floor that was originally carpet. The skylight and roofing repair is the HOA’s and the upgraded wood floor is the Owner’s.
Outsourcing A Property Management Company:
Pete Reported:
The team initially expects the price would be somewhere between $600-$1000/month, ($20-34/owner) to hire a property management company. The team has only looked at one company and needs at least two others to look at. We’re not sure what year would be best to start this or if this will be best for the association. We have dwindling volunteers to be on the board and committees. This is the main reason for this consideration. Of course, even with a property management company we still the need the board of directors.
Another option that was looked at by the team early in the process is that we could lease a professional property management software and remain self-managed. The one looked at was Condo Control.
Meeting Adjourned: 12:15
Posted in Minutes 2022 by Susan with no comments yet.
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