No Pooled Insurance Without a Master Condo Association

gstockstudio_2This may be one of those cases where FHA makes internal changes to its guidelines for condominium project approval and doesn’t tell anyone, which sometimes happens.  We who submit condominiums for FHA project approval often don’t learn about such internal changes until we submit a project that gets rejected for a reason that we have NEVER heard of.

We are working with a condominium project that shares insurance policies with a bordering condominium.  Let’s call them Condo1 and Condo2, respectively.  Both condominiums benefit from the pooled policy by paying reduced premiums.  In this case, there is sufficient coverage in the policy to replace all buildings and amenities if catastrophe struck and both communities were destroyed.  The liability coverage and fidelity/employee dishonesty coverages also meet FHA’s guidelines.

Condo1 was rejected by FHA for having a pooled insurance policy and the reviewer asked for the Declaration and By-laws for the Master Association.  These documents don’t exist; they are unaffiliated.

This was news to us because we have worked with several associations that have had pooled insurance policies with other condominiums that did not have a Master Association in place.

Interestingly, Condo1 was approved with FHA just over two years ago AND the reviewer at FHA that rejected Condo1 approved Condo2 about 18 months ago. The same insurance policy has been in place the entire time.    Maybe it was OK then, but it’s not OK now…?

I asked that the reviewer speak to his supervisor about it.  Apparently, my request for a second set of eyes made its way to HUD Headquarters in Washington DC.  I received an email about a week later notifying me that HQ said:

“[Name removed] from Washington informed us we cannot accept Pooled policies from unaffiliated associations. I can only accept a policy with a Master Association that has it covered within their by-laws, otherwise the association must have its own policy.”

I would expect that this information will be conveyed to all of the FHA condo project reviewers in all of the Homeownership Centers if it has not been already.  Typically, when an event like this happens that hits HQ in DC, it is broadcast throughout the HOCs via conference call or training/update.

These two associations must now segregate their policies if they wish to maintain their approvals with FHA.  Or create a Master Association which is highly unlikely.

If you are working with associations that have pooled policies like this and they wish to gain or maintain their approvals with FHA, please contact me if you have any questions.

Top Photo Credit: (c) Can Stock Photo / gstockstudio

Insurance Corner with Cody: My Neighbor’s Tree Fell into My Yard.  Who is Responsible?

4336081259_88392f8765_n‘Tis the season of heavy snow, fallen trees and damaged property.  In populated areas, the possibility of a neighbor’s tree falling onto your property is greater during this time of the year.  Who is responsible for the fallen tree is a common question we receive.

The laws in Connecticut regarding trees have often been discussed over the last several years and can be summed up as follows:

If the tree is a healthy tree and was damaged by an “act of God” then the party whose property was damaged is responsible for putting in a claim under their home insurance or out of pocket.

However, if the tree was dead, damaged or neglected then the tree owner is responsible for repairs.

To read more on this topic please see the Connecticut Insurance Department’s website:

The best way to determine who is responsible for a fallen tree damage is to speak with an experienced and knowledgeable agent.  Cody Holmes of Holmes Insurance in South Windsor welcomes your calls and will help review your situation to give you peace of mind.

Cody Holmes
Holmes Insurance, LLC
5 Oakland Road
South Windsor, CT 06074
(860) 644-4200 Office

Fallen tree photo credit: Snowmageddon via photopin (license)

Insurance Corner with Cody: Is Wind a Covered Peril?

vladoA question frequently asked by lenders and homeowners regarding home insurance is whether or not wind is a covered form of loss.  The answer in most cases is “Yes”.  Wind can be categorized as an Act of God and would fall under a covered loss on most policies.

However, there are policies where wind and other forms of loss are specifically excluded.  You will want to check with your agent to be sure you have adequate coverage for your specific needs.

In other cases, mostly coastal wind is a covered form of loss but is subject to an additional deductible separate from the other forms of loss.  The wind deductible is generally a percentage of the dwelling coverage.   This can range anywhere from 2% to 10%.  The higher the deductible is,  the lower the premium will be.

The best way to determine if your homeowner’s insurance covers this type of peril is to have an experienced and knowledgeable agent review your policy with you.  Cody Holmes of Holmes Insurance in South Windsor welcomes your calls and emails and will help you review your policy to give you peace of mind.

Cody E. Holmes
Holmes Insurance, LLC
5 Oakland Rd
South Windsor,CT 06074
Office # 860-644-4200
Cell    # 860-336-7788
Fax    # 860-644-2600
*2012 South Windsor Small Business of The Year*
“I always have time to help your friends and family”

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State of Connecticut Department of Insurance page

Image courtesy of Vlado at