Monthly Matters
Property and Liability Insurance
Posted on February 27, 2023 6:00 AM by Sandi Frenzke
Confusing?  Yes!   Complex?  Yes!   Necessary?   Answer:  Absolutely!!!
Because insurance can be confusing and complex, this Monthly Matters article has been designed to simplify both Arbor Grove Homeowner Association’s and your insurance coverage responsibilities.
Anyone reading this article should know that once you purchase a home in Arbor Grove, a planned unit development, the Arbor Grove Declaration Of Covenants, Conditions, Easements, And Restrictions voted in by you, the homeowner, is the guide to insurance requirements for both the HOA and the Homeowner.  Arbor Grove’s and the homeowner’s insurance policies work together to ensure your investment is fully covered.
First, let’s address the coverage Arbor Grove is required to have (Article XV,15.1: Commercial Property Insurance if you are so inclined to look for yourself) as follows:
  • Commercial Property Insurance – a policy that covers AG’s common property such as buildings from drywall out, shared roofs, clubhouse, swimming pool, etc.  Coverage provides replacement cost of the townhouse buildings from the drywall out to include the building’s exterior.  In layman’s terms, nothing inside your home is covered by Arbor Grove – that’s for your homeowner’s insurance policy to cover!
  • General Liability Insurance – This coverage protects Arbor Grove in the rare instance of someone filing a claim, including bodily injury, property damage, personal injury, and others that can arise from our operations.
  • Directors & Officers Insurance – This insurance policy protects the board members in the event there is ever an accusation or lawsuit from a homeowner.
  • Fidelity Bond – protects against theft or embezzlement by employees, directors, management personnel, or others who might have access to our funds. Not one of us can imagine ever needing this coverage, but alas, it is required, and the Board is going to fulfill its obligations.
Last but not least, we focus on you and your homeowner’s insurance policy. (Again, for those so inclined, please refer to Article XV, 15.2 for Personal Liability Coverage and Unit Owner Insurance Responsibility.  This section of our Declarations and Covenants requires all of us to hold the following coverage:
Personal Liability coverage in a minimum of $500,000 - this coverage protects you from paying out of pocket if you (or another member of your household) are held legally responsible for injury or property damage to a third party.  Of course, you, the homeowner, can purchase more than $500,000 of liability coverage. Many do. 
Before we go any further in this article, I cannot stress enough the importance of meeting with your insurance agent and sharing the Declarations and Covenants with him/her to make sure you have proper coverage.  Hopefully, you will never need them, but as we have all watched from afar the unfortunate events at the 707 building, the unimaginable sometimes becomes a reality.
Insurance coverages that are a homeowner’s responsibility as indicated in Article XV, 15.2: 
  • Building Property Insurance – in some insurance company policies, but not all, this is where coverage for cabinets, counters, trim, sinks, toilets, flooring, patios, HVAC systems (heating and air conditioning), water heater, etc. is covered. Ask your agent!
  • Personal Property – coverage for furniture, kitchen appliances, clothing, electronics, and other removable property items. While typically not the case, with some insurance companies, this may include coverage for cabinets, counters, A/C unit, furnace, water heaters, sinks, toilets, showers, flooring, trim, etc. Again – ask your agent!
  • Medical – provides for medical payments designed to reimburse your guest for medical expenses they incurred while in your unit, whether or not you are at fault.  
  • Loss of Use – helps pay for you to live elsewhere while your home is being repaired after a covered loss.
  • Loss Assessment – Homeowners of units may be liable for their share of the costs for repairs or large insurance deductibles on the HOA’s master policy.  Building deductibles can be high and could be in the thousands of dollars per building. When a deductible becomes payable in a claim, the amount might be divided among all of us as unit owners, who benefit from everything being repaired properly.  Speak with your agent about Loss Assessment coverage.
Declaration Sheet:
Upon home insurance policy renewal, the insurance company provides a new Declaration sheet listing each category and the specific dollar amount of coverage.  Again, we recommend that you review your annual declaration sheet with your insurance agent to ensure the dollar limits provide you ample coverage to protect your investment here at Arbor Grove.  Remember, as an owner in Arbor Grove, you are responsible to replace everything in a unit from the drywall in should an incident occur damaging the interior of your unit.
To assure the HOA’s master policy and the Homeowner’s policy work together, you, as the homeowner, are required per the covenants to list the HOA as an “Additional Insured” on your homeowner’s policy. Being listed as Additional Insured not only makes sure the Association receives a copy of your annual declarations page, but it also assures the Board that in the event of a claim, all parties are considered and protected by our policies. The Additional Insured should be: Arbor Grove Homeowners Association, 709 Arbor Parkway, Bourbonnais, IL 60914.
Not to sound like a broken record, but insurance can get confusing for many, so for the final time in this article, please speak with your insurance agent once a year and share Articles 15.1 and 15.2 regarding the insurance coverages both Arbor Grove and you are required to have.
God willing, you will never need it!   Stay Safe!
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