The Association’s master insurance policy will only cover claims to the building or its units as originally built. This means that any personal property you have within your unit and any improvements you or a prior owner made to your unit is not covered by the Association’s master policy. The cost for you to live elsewhere (or loss of rental income if you rent your unit) is not covered either.
The master policy will only pay for claims above the $10,000 deductible. For example, if an owner was to submit a legitimate claim for $12,000 on the Association’s master policy, the owner would only receive a payment of $2,000. Recovery of the deductible would have to be sought by other means, such as submitting a claim to your own insurance or seeking payment from the individual(s) responsible for the damage.
Your Own Insurance Protection
Proper homeowner insurance that Kukui Plaza owners need covers four areas that the Association’s policy will not cover:
1) The deductible for the Association’s master policy. This will cover the Association’s master policy deductible and will protect you if your unit suffers the damage or if you or your unit is the cause of damage,
2) Improvements to the unit made by you or the former owner
3) Personal property in the unit
4) Lost income to the landlord and replacement housing for owner-occupied units.
Responsibility and the Bylaws
It has always been within the Association’s bylaws to hold unit owners responsible when causing damage to the common elements, limited common elements or other units. At the 2007 annual meeting, ownership chose to further support this policy by accepting the recent Hawaii Revised Statute Chapter 514B into the bylaws. This statute permits a condominium’s board of directors to assess the master policy deductible amount against the owner or owners who caused the damage or from whose unit the damage or cause of loss originated. This is also applicable to claims under the $10,000 deductible amount.
In addition to this, ownership passed an insurance resolution at the 2007 annual meeting which allows the board of directors to require that all owners purchase a supplemental insurance policy to complement the Association’s master policy in accordance with Hawaii Revised Statutes (HRS) 514B. The policy that is recommended is called a Homeowners “HO6” and is relatively inexpensive. The “HO6” policy is designed for condominium unit owners who only need to insure their contents, improvements and personal liability. It is also recommended that you include coverage for the master policy deductible, which is $10,000.
Request for Proof of Coverage
The board of directors will be asking that all unit owners submit proof of coverage with the following minimum limits: a) Dwelling - $10,000 plus improvements; b) Contents - $10,000; c) Liability - $300,000 and d) Loss Assessment - $10,000. Please note that these are minimum limits. You should discuss the coverage you need with your own insurance agent. Please be aware that some policies will not allow the master policy deductible to be claimed under the “Loss Assessment” category but may allow it under the “Dwelling” category.
Having your own policy (which often costs as little as a couple hundred dollars a year) can potentially save you a lot of money should the unforeseen happen. If you have any questions regarding insurance coverage, please contact the Association’s insurance agent, Sue Savio at 808-526-9271 or the Association management office at 808-524-1255.