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Understanding Insurance in a Homeowners Association

Understanding Insurance in a Homeowners Association

Understanding insurance in a multi-unit dwelling/Association can be daunting. What does the Association’s master policy cover? What does my personal insurance policy cover (usually referred to as an “HO6” policy)? Which policy kicks in for a particular loss?

Unfortunately, there are a number of variables that makes it impossible to give a universal answer to these questions. Here are some important concepts to understand.

Coverage – In general, the most important thing to do is read your Governing Documents (typically the Declarations) and try to understand what the Association is responsible for insuring. Does it say the Association will insure wall coverings, floor coverings, cabinets, fixtures, etc.? These are some common terms used to state it is an “all in” type of a policy. Another important distinction is whether the Association will or will not insure “betterments and improvements” or is it “original specs.” If none of these items are listed, it may be stated or implied that the policy is a “walls out” policy and nothing on the interior of the unit is covered.

You should discuss with your personal insurance agent what the Documents state on insurance coverage. One of the first questions your agent should ask when writing your policy is to review the Governing Documents. It can also be helpful to call the Association’s agent and verify what, in fact, the Association has for scope of coverage. Even better, tell your agent they should contact the Association’s agent and “cross the T’s and dot the I’s”

Remember, the role of your HO6 policy is three-fold. 1.) at a bare minimum, to insure construction of the unit (sometimes known as “real property”) up to the Association’s deductible. 2.) to insure components of the property outside of what the Association’s master policy covers. 3.) to insure your personal items/property. In short, understand the Association’s insurance coverage and bridge all gaps with your HO6 policy. *** The amount of coverage to carry on an HO6 policy is completely subjective and up to you, as the owner. Again, at a bare minimum, you want to carry coverage up to the Association deductible on construction already covered under the master policy.

Loss Assessment – Another important aspect of insurance when living in an Association is “Loss Assessment Coverage.” Again, read your Governing Documents. Some Association’s legally require homeowners to carry this type of policy. Loss Assessment Coverage provides protection to the owner should the Association have a loss that exceeds the coverage limits of the master policy, or should/when the Association assess the owner for their share of the master policy deductible. Loss Assessment Coverage would help the homeowner with such an assessment. The amount to carry is very subjective and up to you and your agent to determine – but at a minimum, it should be equivalent to the master policy deductible.

Deductible – Which brings us to the last important component of Association insurance – deductible. It is very important to know what the Association’s master policy deductible is. And to stay on top of it from year to year, as it can change. In most cases, the master policy will not kick in coverage unless a Loss exceeds the deductible. Your HO6 would pay if it is under the deductible. If the Loss does, in fact, exceed the deductible, you/your HO6 would be responsible for the amount up to the deductible.

For example – you live in a condo building and the master policy is an “all in” policy with a $10,000 deductible. There is a $15,000 water loss in your unit. Your HO6 policy covers the first $10,000 – while the Association’s policy covers the remaining $5,000.

To Recap – read your Governing Docs to understand the Association’s insurance scope. Talk in depth with your agent and the Association’s agent, if needed, to develop an HO6 policy that bridges all coverage gaps and requirements. Consider carrying, if you are not already required to, Loss Assessment Coverage. And finally, stay on top of your Association’s policy each year as it renews to make necessary adjustments to your HO6 policy.

Sharper Management HOA Wins CAI MN Association of the Year

Sharper Management HOA Wins CAI MN Association of the Year

Sharper Management is pleased to announce one of their managed HOAs, the Territory Homeowners Association, has won CAI MN’s Association of the Year Award. Honored on September 14 at the annual Vision Awards, Territory is under the supervision of Sharper’s Community Manger Jeremy Larson.

The Association of the Year Award recognizes the outstanding team effort of an association board of directors and homeowners whose members clearly understand their roles and fiduciary responsibilities putting the association’s interest ahead of and above all personal agendas. A board comprised of effective volunteer leaders who are fair, responsible and reasonable in their decisions.

A lovely single-family home development, Territory HOA is still in development but recently transitioned from Declarant to Homeowner Control. It is because of the smooth process and expert planning during this transition that this Association was so deserving of Homeowner Association of the Year.

A key factor contributing to the success of Territory HOA is the diverse expertise their Board members bring to the table. Their skills were put to the test when tasked with developing a detailed Architectural Review process. This is a very important process for all HOAs, but particularly important for this one since parts of the community are still in development. A reliable and efficient approval process is essential in maintaining the continuity of the community.

Another strength of this Board of Directors is their fiduciary diligence. Territory has expansive common areas throughout the development that include a variety of amenities. This Association has found a perfect balance of revenue and managing expenses. Their healthy cash flow is in part due to their diligence in staying on top of Collections.

Maintaining the value of their property through a healthy cash flow, maintenance of common areas, and oversight of the community architecture keeps the continuity and the value of the property high. This Board accomplished all of this in a short timeframe and it is working wonderfully.

“All of us at Sharper Management are happy to see the Territory Association honored in this way. It is truly a testament to innovative thinking, dedication, and great leadership. Congratulations to Territory and to our manager Jeremy Larson for a job very well done,” states Sharper Management’s Associate Director of Community Management, Josh Reams.

About CAI-MN
Founded in 1973 as a multidisciplinary, nonprofit alliance serving all stakeholders in community associations, CAI is the only national organization dedicated to fostering vibrant, responsive, competent community associations. CAI is regarded as the national expert in educational programs and publications about community association governance, operations, and management. CAI’s members look to us for information about new products, educational opportunities, technologies, and better ways to run their communities.

Founded in 2010, Sharper Management is a locally-owned, mid-sized property management company offering a full suite of premiere services to homeowner’s associations of all sizes. Sharper Management currently provides services to the Minneapolis-St. Paul, MN seven-county metro area.

For more information on Sharper Management services and employment opportunities, call 952-224-4777 or send an email to info@sharpermanagement.com.

Chris Gosse Honored at CAI Vision Awards – Financial Impact

Chris Gosse Honored at CAI Vision Awards – Financial Impact

Members of the Minnesota Chapter of the Community Associations Institute recently honored Chris Gosse for his work in the field of community management. Gosse received the Financial Impact Award at CAI-MN’s annual Vision Awards ceremony held Thursday, September 14 in Minneapolis, MN.

The Financial Impact Award is given to a manager who has positively impacted a community in a significant manner from a financial standpoint in areas such as; budget management, capital improvement management, warranty, and insurance claim management.

Among the many accomplishments of Gosse in the past year, his guidance in helping three of his Associations realize the benefits and subsequent implementation of Reserve Studies was significant. Prior to Gosse, the properties did not have a Reserve Study and all three had a history of special assessing members if a need arose. Gosse convinced the Boards of the importance (and statutory requirement) to having a Reserve Study. Through his leadership, each Association did a complete paradigm shift to their capital funding philosophy. From start to finish Gosse was engaged with the Boards and their chosen firms to complete the studies. He also worked with the Boards to incorporate the funding plan in their operating budget and cash flow.Gosse’s other accomplishments in the past year include:
• Improving cash flow by helping a board identify ways to save. The end result was roughly a 20% saving.
• Implementing a Special Assessment in an Association that had previously not done this. Through Gosse’s expert guidance, the Board had a 100% collection rate and the project that necessitated the Special Assessment was completed successfully.
• Helping an aging condo association acquire a loan for $650,000 to complete major repairs that we in immediate need.

This is the second year in a row Gosse has been honored by CAI-MN. In September 2016, he was awarded the Rookie of the Year honor for his outstanding work as a new Community Manager.
“Chris has really hit the ground running since first becoming a Community Manager at Sharper. His willingness to “get the job done” and find creative solutions to problems makes him a great asset to our organization and the communities he serves. He is well deserving of this honor,” states Matt Froehlich, Partner and Chief Operating Officer.
About CAI-MN

Founded in 1973 as a multidisciplinary, nonprofit alliance serving all stakeholders in community associations, CAI is the only national organization dedicated to fostering vibrant, responsive, competent community associations. CAI is regarded as the national expert in educational programs and publications about community association governance, operations, and management. CAI’s members look to us for information about new products, educational opportunities, technologies, and better ways to run their communities.

Founded in 2010, Sharper Management is a locally-owned, mid-sized property management company offering a full suite of premiere services to homeowner’s associations of all sizes. Sharper Management currently provides services to the Minneapolis-St. Paul, MN seven-county metro area.

For more information on Sharper Management services and employment opportunities, call 952-224-4777 or send an email to info@sharpermanagement.com.

Cara Nelson Recognized at CAI Vision Awards – Above and Beyond

Cara Nelson Recognized at CAI Vision Awards – Above and Beyond

The Minnesota Chapter of the Community Associations Institute recently honored Cara Nelson for her work in the field of community management. Nelson was given the Above & Beyond Award at CAI-MN’s annual Vision Awards ceremony.

The Above & Beyond Award is given to an individual for substantive achievement in the areas of task performance, service and humanitarian efforts, and generally going above and beyond the typical job description of a community manager.

Nelson won for a variety of reasons that include:
• An exemplary display of “grace under pressure” when working with boards in conflict;
• Organization and knowledge on maintenance issues;
• Her ability to work with local officials and engineers when called up to do so;
• Team spirit in helping other managers at Sharper when needed;
• Delivering successful outcomes for her communities in a variety of ways;
• Her caring heart in organizing Sharper’s efforts to participate in charity events such as the Polar Plunge

“Cara’s self-starter attitude, knowledge of the business, and commitment to community are all great assets to Sharper Management,” states Candy Lee, Director of Community Management. “We are all happy to see Cara formally recognized for her efforts.”

Sharper Management is a leader in the HOA property management market. Serving the Minneapolis-St. Paul area and Phoenix, AZ; Sharper Management is known for reliability and commitment to service.
About CAI-MN

Founded in 1973 as a multidisciplinary, nonprofit alliance serving all stakeholders in community associations, CAI is the only national organization dedicated to fostering vibrant, responsive, competent community associations. CAI is regarded as the national expert in educational programs and publications about community association governance, operations, and management. CAI’s members look to us for information about new products, educational opportunities, technologies, and better ways to run their communities.

Nicole Larson Joins Sharper Management as an Assistant Community Manager

Nicole Larson Joins Sharper Management as an Assistant Community Manager

Eden Prairie, MN, (September 21, 2017) – Sharper Management is pleased to announce Nicole Larson has joined the Sharper Management team as an Assistant Community Manager.

Larson brings with her an excellent background in residential property management as a Leasing Consultant and an Assistant Community Manger. Her creative spirit, and ability to easily interact with clients are great assets in her new position at Sharper Management. Larson’s professional approach and work ethic exemplify her excitement to learn more about the HOA side of property management and delivering “red-carpet” customer service to Sharper Management’s clients.

“Nicole has the right skill set and personality for this position,” states Matt Froehlich Partner and Operating Officer. “We are happy to have her on staff and helping our customers with their property management needs.”

Founded in 2010, Sharper Management is a locally-owned, mid-sized property management company offering a full suite of premiere services to homeowner’s associations of all sizes. Sharper Management currently provides services to the Minneapolis-St. Paul, MN seven-county metro area.

For more information on Sharper Management services and employment opportunities, call 952-224-4777 or send an email to info@sharpermanagement.com.

 

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Mitchell Jacobson Joins Sharper Management as Staff Accountant

Mitchell Jacobson Joins Sharper Management as Staff Accountant

Eden Prairie, MN, (August 22, 2017) – Sharper Management is pleased to announce Mitchell Jacobson has joined the Sharper Management team as a Staff Accountant.

Jacobson is a recent graduate of Metropolitan State University with a Bachelor of Science degree in Accounting with experience in tax preparation. “We are excited to have Mitch join the team.  His knowledge and attention to detail will be a great asset to Sharper Management.  We’re looking forward to providing our clients the benefit of an additional accountant on staff. Sharper Management is always looking for ways to provide clients with more value. Doing so through investing in additional staff helps ensure on going accuracy and excellent communication,” state Todd Essig, Accounting Manager.

Founded in 2010, Sharper Management is a locally-owned, mid-sized property management company offering a full suite of premiere services to homeowner’s associations of all sizes. Sharper Management currently provides services to the Minneapolis-St. Paul, MN seven-county metro area.

For more information on Sharper Management services and employment opportunities, call 952-224-4777 or send an email to info@sharpermanagement.com.

Sharper Management Expands to Arizona Lance Govang Joins Owner’s Group

Sharper Management Expands to Arizona Lance Govang Joins Owner’s Group

Sharper Management Expands to Arizona
Lance Govang Joins Owner’s Group

Eden Prairie, MN, (August 31), Arizona market. Lance Govang, former President of Associa Minnesota, will lead the Phoenix effort. He will join Sharper Management as Owner, President, and CEO of Sharper Management Arizona.
Govang brings a varied and impressive resume to the Sharper Management team. He possesses over 20 years of property management experience and, since 1995, has specialized in Residential Real Estate and Community Association Management. Awards and designations held by Govang include the Certified Manager of Community Associations (CMCA), the Association Management Specialist (AMS), and the Professional Community Association Manager (PCAM) from CAI.

“I’m looking forward to bringing the level of service and integrity Sharper Management is known for to the Phoenix area. Phoenix is a growing community with many common interest communities. This is an excellent market for a client-focused company like Sharper Management to expand. Sharper’s services will be a wonderful addition to the Phoenix property management community,” states Govang.

Sharper Management is set to open their new office at 4731 N. Central Ave. in August 2017. Founded in 2010, Sharper Management is a Minnesota-based, mid-sized property management company offering a full suite of premiere services to homeowner’s associations of all sizes. Sharper Management currently provides services to the Minneapolis-St. Paul, MN seven-county metro area and the Phoenix, AZ market.

For more information on Sharper Management services and employment opportunities, call 952-224-4777 or send an email to info@sharpermanagement.com.

 

 

Isaiah Vigil Joins Sharper Management

Isaiah Vigil Joins Sharper Management

Isaiah Vigil has joined the Sharper Management team as a Community Manager.

Vigil brings a background in the hospitality management world to his new role with Sharper Management. A dedicated professional, his positive attitude and a true dedication to working with others in a team as well as family environment are things that attracted him to the company.

“We are thrilled to add Isaiah to the Sharper family.  His aptitude for this industry coupled with his professionalism and customer service have proven to be great assets.  We are already receiving compliments from properties he manages,” states Candy Lee, Director of Community Management.

Storm Damage and Your HOA – Choosing a Restoration Company

Storm Damage and Your HOA – Choosing a Restoration Company

Summer storms in Minnesota are shaping up to be a regular occurrence in 2017. The June storm that caused significant damage in the northern metro prompted us to review a few things you may want to know about storm damage and living in an HOA.

First off, all HOAs have their own set of governing documents that dictate protocol for things such as external maintenance and restoration. Generally, your HOA’s insurance protects the exterior of your home (studs out) while your homeowner’s policy will cover the interior (studs in). This may differ in townhome associations that are free-standing (those with no shared walls or roof lines).

With that being said, in the event of a major storm that creates exterior damage to your HOA such as hail damage, loss of roofing, trees falling on your home etc., the Association’s policy covers your exterior. What may be confusing is coverage for damage on the inside of your home as the result of storm damage. An example of this is water damage caused by a hole left in the roof after a storm. Your insurance (you) are responsible for the water damage inside your unit.

Restoration companies that specialize in 24-hour response are critical in mitigating further damage from a storm event. When we look for storm damage companies, this is one of the first things we ask of the restoration company. What mitigation and temporary things do you put in place to minimize further damage.

Keep in mind an emergency response to the situation is not the final restoration. Do not expect a team to completely replace your Association’s roof the next day. The emergency response will secure the property against the elements. It will stop the rain, wind, and heat/cold from entering your home.

Sharper Management also looks for companies with good reputations. Online testimonials, membership in local and national organizations, and being a member of the BBB are all pieces we consider when bringing companies to the table for your Board to review. The company offering the bottom line price may not be the best choice for your restoration project.

When a restoration project is to start, Sharper Management works with your Board to notify residents of the project schedule. Sometimes it is necessary for work to begin in the early morning to ensure timely completion. This becomes a significant consideration when many properties in an area have been damaged. A little inconvenience, such as a 7am start, is worth it in the long run to restore your home as quickly as possible.