During this tough economy, homeowners associations (HOA’s) and property owners associations (POA’s) in San Antonio, Schertz, Seguin, Helotes, Bandera, Boerne, Canyon Lake, Universal City and Cibolo are looking for ways to trim expenses, but opting out of insurance coverage is not a prudent choice. Even the smallest homeowners association or neighborhood association needs insurance coverage. If an HOA owns any property, then there is a risk that a resident, visitor or guest could be injured or hurt on that property. Insurance claims are rare, but it is too risky to consider going without coverage, even for a short time period.
Eliminating insurance coverage may save the association money in the short term, but the cost savings is not worth the risk of exposing the community to tremendous liability. In addition to maintaining coverage, HOA’s or POA’s should also take preventive actions to limit their risk exposure. These precautions include the obvious steps like maintaining equipment and placing fencing around swimming pool and retention ponds. However, consistent enforcement of your CCR’s may be another means of prevention.
For example, Main Street HOA’s CCR’s clearly do not allow street parking, yet the association has been extremely lax in their enforcement of the parking rules. In fact, cars line both sides of the narrow streets most days of the week. What happens when a child darts out between cars to chase a ball and is accidentally hit? The driver claims their visibility was impaired by all of the cars parked in the road and they didn’t see the child until it was impossible to stop. Was the association negligent? Possibly. Juries in these types of cases can go either way. The association, however, will still have the cost of the lawsuit even if the association wins.
Accidents happen. That’s why it is wise for the community leaders to plan for the best and prepare for the worst that can happen in an HOA. Saving a few hundred dollars a year won’t seem so significant if an accident occurs. A homeowner’s share of an insurance premium is minimal when compared to the sizeable costs of a legal defense, court fees and a settlement.
Spectrum Association Management is a homeowners association, condominium association and high rise association management company serving Dallas, Fort Worth, San Antonio, Houston and Austin areas. To learn more about Spectrum Association Management visit us at http://www.spectrumam.com/ or to request a quote for management click here. Also be sure to “like” us on Facebook by clicking the following link: http://www.facebook.com/spectrum.association.mgmt.