Civil Code Section 1365 (e) is the Civil Code that requires disclosure as follows:
A summary of the association’s property, general liability, fidelity bond, and earthquake and flood insurance policies (to the extent there is coverage for earthquake and/or flood coverage) to be distributed within 60 days proceeding the beginning of the association’s fiscal year. For each policy, the following applies:
The name of the insured________________________________
The type of insurance__________________________________
The policy limits of insurance___________________________
The amount of deductibles, if any________________________
To the extent any of the information required is included in the insurance policy declaration page for the particular type of insurance, the declaration page may be distributed in lieu of the above information.
Please note the following additional information:
“This summary of the association’s policies of insurance provides only certain information, as required by subdivision (e) of Section 1365 of the Civil Code, and should not be considered a substitute for the complete policy terms and conditions contained in the actual policies of insurance. Any association member may, upon request and provision of reasonable notice, review the association’s insurance policies and, upon request and payment of reasonable duplication charges, obtain copies of those policies. Although the association maintains the policies of insurance specified in this summary, the association’s policies of insurance may not cover your property, including personal property or, real property improvements to or around your dwelling, or personal injuries or other losses that occur within or around your dwelling. Even if a loss is covered, you may nevertheless be responsible for paying all or a portion of any deductible that applies. Association members should consult with their individual insurance broker or agent for appropriate additional coverage.”
[THE FOLLOWING ARE NOT REQUIRED BY STATUTE, BUT ARE OPTIONAL ADDITIONS ACCORDING TO PREFERENCE OF ASSOCIATION AND DESIRE TO ENROLL HOMEOWNERS IN GETTING ADEQUATE INDIVIDUAL COVERAGE COULD ADD ANY OF THE FOLLOWING]
If the policies mentioned above lapse, are canceled, are not immediately renewed, restored or replaced, or if there is a significant change, such as a reduction in coverage or limits or an increase in the deductible, the association shall notify the membership as soon as “reasonably practical”, by first class mail. If the association receives a notice of non-renewal and the coverage will lapse, the association shall “immediately notify” the members.
It is important to note that the association does not carry earthquake insurance coverage. It is not required to do so by the governing documents for the association. To that end, each individual owners should take whatever precautions they want to take with regard to earthquake coverage. You could check with the California Earthquake Insurance Authority, a state agency that provides policies. Most of the primary carriers in the state can obtain policies through the authority. It is important in discussing coverage to protect your selves that to point out to the carrier that the association has no master coverage for earthquake. Please be advised that some policies sold to owners depend on master coverage for the association providing the primary coverage, and others do not. It is important to seek coverage for your own personal property, rebuilding of your particular dwelling unit within your building, and most importantly, the special assessment loss assessment coverage to pay for any assessment that might be imposed on all of the members by the association.
Additional helpful language from the CC&Rs; that deals with individual Owner coverage to help Owners realize they have an obligation also.
Copyright Beth A Grimm, A Professional Law Corporation
Associations may use this disclosure form but reproduction of it on any website or use by others for their clients without written permission and credit to Beth A. Grimm, PLC, is forbidden.