Insurance Coverage Rule (Adopted May 15, 2004)
The following rule pertaining to insurance coverage was approved by the
Board on May 15, 2004 and has been recorded with the El Paso County Clerk’s
Office.
BACKGROUND
The Pinon Glen Homeowners
Association (the "Association") is directed and empowered by Article
VIII of the Association's Declaration of Covenants, Conditions and Restrictions
(the "Declaration") to obtain and maintain insurance policies for the common
benefit of the Association's members.
Section 8.3(e) of the Declaration and Section 1(a) of Article VII of
the Association's By-laws empower the Association to adopt and publish rules,
regulations, and nondiscriminatory policies and procedures relating to the
submittal of claims, responsibility for deductibles and any other matters of
claims adjustment.
Section 8.3(e) further provides that to the extent the Association
settles claims for damages to real property, it shall have the authority to
assess negligent Owners causing such loss or benefiting from such repair or
restoration for all deductibles paid by the Association.
The Association's Board has given lengthy consideration to the problem
raised by interpretation of coverage issues and is very concerned that gaps in
coverage may occur that would affect the health, welfare, safety and value of
the Pinon Glen development.
From time
to time, the Association’s insurance carriers may provide broader coverage than
the Declaration requires or may impose certain requirements and limitations.
The
Association desires to make an equitable arrangement for the allocation of
losses in the event that the Association elects certain insurance coverages, so
that it may equitably and consistently enforce the Declaration to protect the
interest of all owners.
THEREFORE,
IT IS RESOLVED that the following rule and regulation is hereby adopted by the
Board of Directors of the Association:
RULE
1. Interior loss or damage. Since any loss or damage in the interior of
a Unit should ordinarily be covered by the Owner’s individual insurance policy
as provided in Article 4.4 of the Declaration, to the extent said loss is covered
by the Association’s insurance, the Owner shall be responsible for paying the
deductible or any portion of the loss or expense which is not covered by the Association's
insurance.
2. Exterior loss or damage. If any loss or damage to the exterior of any
Unit is not fully covered or paid by the Association’s insurance, the amount of
that uncovered or unpaid portion shall be paid equally by all of the Owners, except
that when and to the extent such loss or damage is caused by an "Owner-Responsible
Event" as defined below, the Board in its sole discretion may determine that the
Owner and his/her Unit shall be solely responsible for any portion of the loss
or expense that is not covered by the Association’s insurance. An "Owner-Responsible
Event" means: (a) a negligent act or omission of an Owner; (b) a negligent act
or omission of that Owner’s family, agent, contractor, guest, invitee or tenant;
(c) a negligent act or omission of another individual, provided that such individual
was on the premises with the consent of the Owner or with the consent of a person
enumerated in "b" above; or (d) a pet or other animal brought on the premises
by the Owner or by one of the other persons enumerated in "b" or "c" above.
3. Assessment and collection. Any Owner’s failure to pay his/her share
of any loss allocated to him/her under any of the preceding sections of this Rule
shall result in the assessment of a fine equal to the amount unpaid, plus costs
of collection. The Association may exercise all applicable rights and remedies
to collect fines, including the right to add such fine to the assessment to which
the Unit of such Owner is subject, and such fine and assessment shall become a
lien against such Owner's Unit as provided in Article 3.10(b) of the Declaration.
4. Owners’ coverage. Owners are responsible for reviewing the Association’s
insurance coverages and obtaining such insurance as the Owners are required or
may desire to have for their own protection. The Association recommends that all
Owners obtain HO-6 coverage for their respective Units with at least $5,000.00
for "Coverage A-Dwelling" and at least $5,000.00 for "Loss Assessment", as required
by Article 8.4 of the Declaration. Nothing in this Rule shall impose any liability
upon the Association.
back