Cohousing-L Mailing List: Re: Insurance for cohousing communities

[michael barrett (mbarrett]

Insurance is a funny business. Insurance companies are, not 
unexpectedly, risk averse, even though risk mitigation is why they exist.

Two things to consider:
1) In searching for an HOA insurance policy be aware that the policy is 
(usually) to protect the HOA from property damage losses (the Common 
House burns down) and liability (a _visitor_ trips, falls and suffers 
injury and sues the HOA). Notice that I say _visitor_ . My understanding 
is that HOA _members_ cannot benefit directly from HOA insurance, it's 
like sueing yourself. (But I'm not an attorney so check this out).

2) The way HOA liability policies are (usually) written is that they 
include everything _except that which is specifically excluded_ in the 
policy.  Thus in shopping around for HOA liability insurance, honestly 
answer all questions the agent asks, be careful what you volunteer, and 
also request (actually demand) a copy of the full policy that you are 
considering purchasing.  The full policy may run 20-30 small-type pages. 
You don't want just a one page "coverage" note.  Take the full policy to 
an attorney, tell him (or her) what you are doing and what your concerns 
are and ask if the policy excludes pottery kilns and associated 
liabilities (or whatever). Give him a copy to study and get his 
considered answer - in writing.

If you tell an insurance agent of your specific plan, _h__e_ personally 
may think it's just fine and be surprised when the target insurance 
company declines to provide insurance unless pottery kilns (or whatever 
the perceived risk is) are specifically excluded by a rider on the 
policy.  That was our experience.   If the agent represents several 
insurance companies - and many do,  he is (I understand) professionally 
obligated to share what he knows with all "his" companies, so again be 
honest but also be judicious in how much information you volunteer._
___
When we added our hobby "kiln", (actually something else but which 
scared off insurers) we sought new insurance, since on volunteering our 
intention to the prior company they said yes but only with the excluding 
rider requirement.  Also shop around.  Our present (well-known) company 
provided higher coverage (on the Common House) and HOA liability 
coverage for a lower cost.

Some folks may question the ethics of this approach.  One can also 
question whether insurance companies should be allowed to cherry pick 
their clients so as to maximize their profits. For better or worse, we 
live in a capitalist society, bound by laws (with which we are compliant).

Michel Barrett  -  15 years in co-housing.

On 10/27/2017 6:34 PM, Linda Hobbet wrote:
> Hi,
>
> As a developing community approaching construction we have started 
> thinking about insurance. It was prompted by a question to a member's 
> insurance company about the art studio we plan to build, including a 
> kiln. This prompted an alarmed reaction (honestly, a properly 
> installed electric kiln is not dangerous) and saying we would have to 
> be insured as a business. The plan is for it to be part of our 
> recreational facilities for the members, not a business and we aren't 
> zoned for business. We are also planning a woodworking shop. They will 
> not be in the same building as the common house.
>
> What have other condominium model communities experienced in finding 
> good, hopefully reasonable-priced insurance covering liability, 
> grounds, common facilities, and exteriors? Does any other community 
> have a kiln? What other issues do we need to consider?
>
> Thanks,
> Linda Hobbet