Condo owners need supplemental insurance

Q: State law says homeowners association insurance is primary. If so, why would anyone carry insurance other than in personal items? When we have water damage from a water heater the responsible owners pays our deductible and the HOA insurance pays the rest. We have considered getting HOA insurance that does not cover water damage. If so it would seem the responsible party would pay for all of the damage.

Would not having water damage on our HOA insurance be a problem? The deduction is normally $5,000 so if it is our fault the $5,000 would pay for a lot of repairs if needed.

What was the intent of the Legislature to have the HOA insurance be primary?

A: The association’s insurance is only the primary insurance for condominiums and cooperatives. First, by definition, the unit owner owns only the space between the walls and ceilings, and floors and shares a percentage of the common area/elements. If you live in a single-family home association, the association’s insurance would not cover any damage to your home.

Second, the association’s insurance does not include any improvements that have been made inside a condominium unit nor does it cover any personal property. For those two reasons alone, homeowners should protect themselves.

Homeowners who reside in condominiums and cooperatives should contact their insurance agents and obtain a what is called an HO6 policy that complements and supplements the association’s policy, and surprisingly is cost-effective. This policy would be a secondary one.

Let’s assume the association’s deductible is $2,500, or $5,000 as is the case for some associations that have experienced high volume of claims. If you have an HO6 policy, your deductible would be closer to $500 (generally speaking). You would file a claim with your HO6 policy, pay the $500 deductible and your secondary insurance policy, the HO6 would pay the $2,500 or $ 5,000 deductible along with any damage not covered by the association that may be covered by the secondary policy.

I don’t believe you can obtain any property insurance policies that excludes water damages. What you can do is to establish two levels of deductibles, one for other kinds of damages and the second for water damage caused by breakage of pipes and appliances, etc.

Q: I’ve been in my house since 1988 (when it was first built), and I’m now 80 years old.

First of I’ve always paid my assessment fees one year in advance. Except for one year where they made me paid twice (another ugly story).

Over the past 20 years, my HOA never stops making trouble. It’s always in a cycle: They are unhappy with something (like inadequate landscape, but mine is just a plain desert landscape, nothing out of ordinary), then there are fines. I talk to board of directors when I can, then it halts for a while, then they remove the fines; and then start over with something else. This time, they put a lien on my house and give my case to a lawyer, after they moved my $308 yearly assessment toward the fine. It’s like stealing my house. I got a letter from the lawyer threatening foreclosure unless I paid.

I’m old and living on a $400-a-month Social Security check. Sometimes, I have to leave the country for health care because I can’t afford Medicare part D. (Yes, it’s actually cheaper to get medical care overseas.)

Can you point me to the right direction? I really appreciate your help.

A: It is against state law for an association to apply any assessment toward the payment of fees or other charges without the express permission from the homeowner (Nevada Revised Statutes 116A.8). You should immediately contact the Nevada Real Estate Division on East Sahara Avenue, and file a complaint. You needs to have the division see if the foreclosure process is being followed properly.

Barbara Holland, certified property manager, broker and supervisory certified association manager, is president and owner of H&L Realty and Management Co. Questions may be sent to the Association Q&A, P.O. Box 7440, Las Vegas, Nev., 89125. Fax is 702-385-3759, email is support@hlrealty.com.