Having your own home, no matter if it’s a house or an apartment, comes with a lot of challenges, risks, and responsibilities. As a homeowner, you need to always be careful about what’s happening inside, is there any risk of gas leaking, floods, fires, and how to prevent them. But, at the same time, we all know that we can’t stop some things or fight against them, especially when it comes to natural disasters. But, that doesn’t mean you don’t need to be cautious and try to think about some important things in advance, even though they may never happen. According to farmersbrown.com, you can let the agency create a plan and strategy for your insurance coverage, and get the best service possible when it comes to coping with disasters and what’s left behind them.
Call of Duty
In the aftermath of a disaster, your Homeowners Association (HOA) is duty-bound to deal with all immediate hazards within its jurisdiction. And, in the long term, to restore all damaged common areas to their pre-disaster state. This may place considerable strain on your HOA’s finances. An insurance policy may provide the much-needed funds to implement your disaster response strategy, finance clean-up operations, and pay for the restoration of affected common areas. So, having this type of insurance is only a prevention step, especially if you live in a risky area, and you are sure you want to avoid all the unpleasant things that come in the catastrophe aftermath.
HOAs managing neighborhoods face different risks than those managing condominiums. Though the types of insurance may differ, both will be left vulnerable without coverage.
Your HOA is responsible for disaster management during and after an incident within your jurisdiction. Usually, this will involve coordinating rapid responses to threats and dangers, including relocating the people to safer places, making sure professionals are around so they can control the situation, and so on. But, you will also need to pay attention to other considerations, including:
- The rapid availability of emergency funds.
- The extent of responsibility to affected owners.
How do these expenditures relate to insurance? Insurance policies may take some time to payout, so you will need a short-term bridging solution. In case of an emergency, you can’t expect the agency to complete everything for you. They are there only to ease the expenses, and to make the whole process easier for those who suffer. But, you should have those services included in your policy, and that comes with some fees, and that’s why most of the people are taking the basic plan, and they are surprised to hear that it doesn’t cover every disaster result. That’s one of the reasons you should be asking a lot of questions to the agents, and make sure you are getting a complete service, not just some parts of it.
Consider the types of emergency expenditures following a flood? Several access roads are covered in debris, trees have fallen over and a damaged substation has left 15 homes without power. Contractors are in high demand and the only backhoe available is two counties away.
Daily transactions funded out of your operating account could soon bleed the account dry, and the next thing you know, you are running on reserve funds.
In a situation like this, the future payment of an insurance policy can be used to take out a short term loan.
We can use the same example with any disaster possible, no matter what its nature is. Every day of our lives is a risk, and the current pandemic showed us that no one can stand above nature and try to over smart it. In the world, there are a lot of examples of forest damages, or changing the river’s routes, so there can be build houses and apartments – but sadly, most of the time, nature brings back all the things to normal, damaging those buildings and houses. That’s one of the reasons why we face a lot of risks of catastrophes because someone in the past tried to go against nature. Of course, you are not guilty of that, but when you choose your new home’s location, it’s always better to check the natural conditions in the area, even for decades ago.
Some HOAs are charged with providing emergency assistance to affected members. This could range from simple acts like helping them find accommodation for the night, all the way to longer-term assistance.
If your HOA is managing condos, you will need to pay special attention to this provision, as it could amount to considerable sums of money, depending on the extent and nature of the damage.
Once the immediate hazards have been dealt with, you will need to start rebuilding damaged common areas, including in some cases damaged condos.
Some contractors will be willing to start work while your HOA is waiting for the insurance payment. This can alleviate a lot of potential pressure and avoid strained relations between you and your members.
Without insurance money to back you up, you may find your HOA forced to either increase monthly service charges or postpone much-needed reparations.
Your state’s regulations may prohibit you from simply returning structures to their original state, and require that you rebuild them to conform to the latest building codes and regulations.
This is an important consideration when taking out your policy. Be sure to value buildings in order to meet this requirement in the case of a disaster. New codes and regulations can exceed current value by an order of magnitude.
Without adequate insurance backing up their disaster strategy, your HOA may well find itself facing a new disaster, albeit one of its own makings. So, be responsible and build up that strategy for you, your family, and of course, for the community and people around you.