(Third in a series of three articles)

Condo Home Insurance at The Villages

In the previous two articles on Your HO6 Policy, we talked about some of the interconnections between your HO6 policy and the Association’s Master Property insurance policy.  Here are some Frequently Asked Questions (FAQs).

There isn’t room in a short article to answer all your questions, so we’ve put more information on the Villages Member Portal, in the Association’s Governance Area: https://member.thevillagesgcc.com/static/the-villages-association/

You can also call The Villages’ Director of Board Services or Senior Assistant General Manager (General Manager’s Office Liaison) or use the “Ask the ABOD” feature in The Villager.

My HO6 insurance company just told me they are not renewing my policy next year.  Where can I find another company that sells policies to Villages residents?

• Unfortunately, this is not uncommon anymore, both outside and inside the Villages.  It doesn’t even depend on whether you have made any claims or not.  

• To find a new insurance company you can ask a friend for some recommendations, but even if they have a current policy, their insurance company may not be accepting new customers.

• The only central directory of companies currently offering insurance is a list on the California State Insurance Commissioner’s website:  Property Insurance Companies  

https://interactive.web.insurance.ca.gov/apex_extprd/f?p=144:11:12932100931491::NO:RP,11:P11_LINES_OF_INS,P11_SORT_TYPE:Homeowners,A&cs=1mWeRo8dRpMeNc5DG5G1B56NErek

Why does The Villages have two different Master Property Insurance Policies?

• Because the Villages Management team and our insurance brokers at Brown & Brown are on their toes at finding lower cost solutions for our insurance. 

• Some history – 

• In the past, over five years ago, The Villages was able to buy property insurance from a single company.  But as inflation caused replacement cost to dramatically increase, the danger of wildfires around The Villages increased, and insurance companies were suffering losses due to unusually large and frequent major fires, floods, and hurricanes, individual companies no longer wanted to insure the whole Villages community or even parts of it.
• The Villages was forced to use multiple non-admitted “excess and surplus carriers” in a “stack” of small policies to cover all its insurance needs.  Since these carriers are not regulated by the State of California, they can charge whatever the market will bear.  As a result, Insurance Costs soared.
• But the Insurance marketplace keeps evolving – risk models are improved, risk mitigation efforts are rewarded, higher premiums are being allowed to admitted carriers, some insurance companies have developed a new appetite for selling The Villages property insurance again.

• One admitted carrier, Philadelphia Insurance, was willing to insure what it considered the lowest risk Villages – Sonata, Del Lago, and Fairways at a substantially lower cost of insurance and with no Betterments and Improvements sublimit.  While ultimately the goal for The Villages will be for all Villages to be able to purchase this type of lower cost insurance, the marketplace is not there yet.  If, and when, more opportunities arise, the ABOD and Management will act so that more Villages will be able to take advantage of lower rates and better coverage.

What about Earthquake Insurance?

• The Association Master Policy no longer covers Floods or Earthquakes.  If you want earthquake insurance, you must purchase your own policy.

What if I, or my insurance agent/broker has more questions about the Association’s Master Policy and my HO6 Policy?

You can call The Villages insurance broker, Brown and Brown for more information:

To obtain proof of coverage Certificates. please send your request to:
Email: coi@bbrown.com

General Requests
Molly Morris. (503) 219-3229   
Molly.morris@bbrown.com

In future articles we will discuss how the Association is addressing the current Insurance Crisis.

A group of dedicated volunteers from The Villages participated in a two-day training program on October 16 and 18 to help the community work toward becoming designated as a Firewise community. Organized by The Villages’ Ad Hoc Fire Safety Committee, the training was conducted by the Santa Clara County FireSafe Council. Ten volunteers learned about wildfire science, fire behavior, and methods for enhancing wildfire resiliency in The Villages.

In addition to classroom learning, the training included fieldwork where volunteers were introduced to Fire Aside software, used on an iPad for data collection. They practiced using the software at both a single-family home and a condominium building. In the coming weeks, these volunteers will collect data on various homes and facilities in The Villages as part of the process for earning the Firewise designation. This effort will involve reviewing data from the 2,536 homes in the community, as well as Club Facilities, over the next few months.

Stay tuned for more updates as the initiative progresses.

Earlier this year, Villages volunteers began to put the framework together to begin work towards becoming a designated Firewise community. 

The Firewise USA® program, led by the National Fire Protection Association (NFPA), helps California communities improve their wildfire resilience. It encourages collaboration among residents, local fire departments, and stakeholders to make homes and areas more fire-resistant. Supported by CAL FIRE’s Community Wildfire Preparedness & Mitigation Division, this initiative is key to California’s wildfire preparedness strategy and assists communities in achieving Firewise designation.

The Ad Hoc Fire Safety/Firewise Committee is a working on behalf of the three Villages corporations to increase wildfire resiliency for the entire community.

Soon, Villages volunteers will be out walking through the districts looking at  building structures and landscaping. They will be recording the data on iPads. You may see them looking at fences, siding, windows, shrubs, trees, etc.  The Villages will use this collection of data to determine the work to be done over several years to enhance wildfire resilience. 

In July 2022,  both The Villages Association (ABOD) and The Villages Homeowners’ boards (HBOD) introduced an earthquake insurance program offered by Motus Insurance Services.  The Motus earthquake insurance program is an optional insurance policy that The Villages owners may purchase to protect themselves in case of an earthquake that causes damage to their property. Motus offers temporary living off-site and potential special assessments cost assistance. It’s an alternative, with some unique features compared to other individual earthquake insurance programs such as those offered by the State of California’s CEA program, or some private insurance companies.

A Motus policy is not earthquake insurance purchased by, or for, any of The Villages corporations – it is available only to individual homeowners (condominiums and single-family homes).

With the Motus program, each owner of a condo/villa or single-family home must decide for themselves whether they want to buy earthquake insurance and the type and amount of coverage. Motus offers two policy versions – one version for condo/villa owners, and another version tailored for single-family homeowners.

To learn more about Motus, view the Motus Enrollment Materials below, or visit www.MOTUSINS.com.

Disclaimer: Purchasing a Motus insurance policy is strictly an individual resident’s choice.  Neither the Villages Association, nor the Golf and Country Club, nor the Homeowners’ corporations make any recommendations for or against purchasing a Motus policy.

(Second in a series of three articles from the Ad Hoc Insurance Committee)

Disclaimer: These articles are provided to assist you in understanding some of the complexities in condo insurance policies. You have the ultimate responsibility in understanding your personal insurance needs and the Association’s requirements as spelled out in the CC&Rs. The Association’s Master Property Insurance policies are listed in the annual Association Disclosure statement and online on the Members Portal. Please use these materials in consultation with your professional insurance agent/broker.

Home insurance at The Villages for Condos comes in two pieces—the Association’s Master Policy, and your personal HO6 Policy. To get your best coverage, your HO6 should fit properly with the requirements of the Association Master Policy and meet your personal needs.

Your HO6 Policy

Every condo owner is required to have an HO6 policy and provides proof of coverage each year. Please consult with your insurance professional on the best policy and coverage for your needs.

What the Villages Association currently requires to be in your policy:

• Loss Assessment in the amount of $50,000

To help you pay any “Special Assessment” from The Villages in the case of the Master Policy being inadequate to cover the Association’s losses in a major disaster.

• Personal Liability—a minimum of $300,000

To protect you from any personal liability claims.

• Personal Property coverage (the amount to be determined solely by you, the owner)

Only you can determine the value of your personal property and how much you want to insure for it. The Master Policy does not cover your personal property.

Other items you should carefully consider and get professional advice on:

Dwelling insurance coverage to cover the Betterments and Improvements you and/or previous owners have made to your condo since it was originally built, indoors or outdoors.

• The current Master Policies have limits on how much will be paid out for repair or replacement of your betterments and improvements (examples—upgraded floors, upgraded cabinets, upgraded counter tops, major bathroom improvements.)

-For most Villages, the limit is $50,000 of coverage and additional HO6 Dwelling Insurance may be advisable.

-For Del Lago, Sonata, and Fairways residents your betterments and improvements do not have a $50,000 limit on coverage.

•In all cases, a careful discussion with your insurance professional is advised.

If you are responsible for the loss event, you will be responsible for the Association’s insurance deductible (up to $50,000). Consider increasing your HO6 policy to cover this expense (typically “Dwelling” coverage, some insurance companies place this under Loss Assessment. Your insurance agent can advise you.)

• Loss of Use Coverage (When you can’t live in your condo until it has been repaired.)

• It takes months, sometimes years to finalize your claim, get new building permits, and rebuild. You should be prepared to live somewhere else, and insurance can help pay for a rental or lease of another place during that period.

• Personal Liability—Increasing the amount of Personal Liability beyond the minimum required by the Association.

-This is a good topic to get the advice of a professional.

-In addition to typical personal liability events, if you cause property damage to your neighbor’s condos, you are likely to be responsible for their damages.

• Other add-on coverages like for the high-value items (examples—jewelry, artwork, antiques, etc.)

-Basic HO6 policies have relatively low coverage limits on these items unless you provide an inventory and pay for additional coverage.

• Additional insurance policies for things like golf carts, which are not included in your HO6 policy.

There are many discounts offered by different insurance companies so look out for those to help reduce your policy costs. Some examples—Gated Community/On-site Security, Firewise Certification. Protective Devices (e.g. smoke/carbon monoxide alarms), Mature Policy owner, and Multi-Policy (with the same insurance company).

In the next article in this series, we will answer some key questions about your HO6 policy.

The Villages Association Board of Directors is seeking volunteers to serve on the Association Rules Committee.   The purpose of the Rules Committee (Association Policy APo and Apr 204) is to provide advice to the Board on Association rules-related matters. Responsibilities include:

• Review existing rules and regulations as necessary, to determine relevance and need for update and/or modification.
• Implement the procedures outlined in Section I. “INTRODUCTION, THE RULES IN GENERAL,” Item 3, of The Association Rules Document to recommend to the Board new rules or modifications to existing rules.
• Meet, as needed, with the Club and Homeowners’ Rules Committees to review matters of common interest and to foster communication amongst the groups. Incorporate applicable changes from these groups, DACs and the Association Board of Directors into rules proposed to be changed.
• Assist the Board, as requested, to interpret rule language and intent.

If you are interested, please contact BoardServices@the-villages.com 

With the Association Board announcing that Homeowners Association (HOA) rules will soon be scrutinized and more closely enforced throughout The Villages, Public Safety Director Matt Hidalgo reminds Villagers of the rules that are frequently violated—such as the parking rules. 

Rule 2.17.1

Residents must have all vehicles registered with Public Safety—make, model, license plate, and your vehicle’s color. Once registered, Public Safety will place a bar code on your car for convenient entry into The Villages.

Rule 2.17.2 

All registered vehicles must remain on the owner’s property, whether this is your garage, carport or driveway. Cribari and Del Lago Villages and Montgomery Circle are limited to a single parking space.

Rule 2.17.2 (A,B, & C) 

Due to the limited parking in Cribari and Del Lago Villages and Montgomery Circle, common-area parking is permitted, but limited to 48 hours. If you choose to park in these designated areas, please make sure you move your car within the 48-hour period. 

If a carport is part of your home, please make certain that only permitted items can be found there. As part of Rule 2.08.5, only vehicles, bicycles, mopeds, golf carts, ladders, and small collapsible handcarts are allowed.

If you have questions regarding The Villages parking rules, please stop by Building C, call or send an email to publicsafety@the-villages.com.   

(First in a series of three articles from the Ad Hoc Insurance Committee)

Disclaimer: These articles are provided to assist you in understanding some of the complexities in condo insurance policies. You have the ultimate responsibility in understanding your personal insurance needs and the Association’s requirements as spelled out in the CC&Rs. The Association’s Master Property Insurance policies are listed in the annual Association Disclosure statement and online on the Members Portal. Please use these materials in consultation with your professional insurance agent/broker.

Introduction

Home ownership in an HOA condo is a little more complicated than when you owned your own house outside of The Villages. There’s a portion of your condo that is the responsibility of The Villages Association (which is protected by the Master Property Insurance Policy paid for by the Association) and a portion of your condo plus all your personal property that you are responsible for (which is protected by your personal HO6 Condo Insurance policy).

Basically, the structure of your condo—the foundations, the walls, the roof, and the floors, as they were originally built or have been improved by the Association—is insured by the Master Policy. In a disaster, the Association’s Master Policy will be applied to those elements in an attempt to replace them as is, but coverage is only assured to replace them with the same or similar build quality as when the condo was originally built. Generally, the original elements were known as “builder’s grade” (i.e., Formica countertops, linoleum flooring, standard doors and windows).

Over the years, many condo owners have substantially improved their homes with new cabinets, flooring, appliances, countertops, and much more. The owner-installed improvements are called “betterments and improvements” and are generally the owner’s responsibility to make sure they are fully insured. Many condos have had multiple owners since they were originally built, so a new buyer may have a hard time knowing what the original build looked like and what items have been upgraded.

The Association’s CC&Rs specify that the Master Policy will actually cover some owner’s improvements—those that are permanently attached to the walls, such as upgraded kitchen cabinets, countertops, and built-in appliances. This is called a “walls-in” insurance policy. Some of the benefits of a “walls in” approach is that it simplifies for the condo owner what they need to insure on their own policy. This led to a common explanation that if you turned your condo upside down and shook it, only those things that fell out would need to be covered on your personal policy. That explanation is simple and easy to visualize. Unfortunately, the world has gotten more complex and more expensive. Due to massive increases in insurance costs, the Association has had to limit the coverage it provides for owners’ improvements. For most condo owners (excluding Del Lago, Sonata, or Fairways), that coverage is capped at $50,000. So if you (or previous owners) have upgraded your condo with better cabinets, built-in appliances, marble/granite counters, expensive tile or wood floors, and so on, your improvements very likely exceed $50,000 in replacement costs and your HO6 policy “Dwelling” coverage needs to cover the difference.  

For condo owners in Del Lago, Sonata, and Fairway Villages there is no cap on improvements.

In this article and the next, we will look at what each portion of your HO6 policy covers, and what decisions you and your insurance agent should be considering at policy purchase and at each renewal.

Your personal HO6 Policy

Every condo owner is required to have an HO6 policy and provide proof of coverage each year.  

What the Villages Association requires to be in your policy:

• Loss Assessment (to help you pay any “Special Assessment” from The Villages due to the Master Policy being inadequate to cover the Association’s losses in a major disaster)—$50,000 coverage
• Personal Liability—minimum $300,000
• Personal Property coverage (the amount to be determined solely by you, the owner)

Other items you should carefully consider and get professional advice on:

• Dwelling insurance coverage to cover the replacement costs of betterments and Improvements that you, and/or previous owners, have made to your condo since it was originally built. The Association’s Master Property policy will only return the Association’s property to the original build quality of the unit.
• If you are responsible for the loss event, you will be responsible for up to the entire $50,000 Association insurance deductible. Consider having your HO6 policy cover this expense (most likely covered under Dwelling coverage, but some insurance companies may cover this under Loss Assessment instead). You also will be responsible for damages to your neighbors’ units—consider that in your HO6 Personal Liability insurance purchase.
• Loss of Use (when you can’t live in your condo until it has been repaired)
• Increasing the amount of Personal Liability beyond the minimum required by the Association
• Other add-on coverages like for high-value items (i.e., jewelry, artwork, antiques, etc.)
• Additional insurance policies for things like golf carts, which are not included in your HO6 policy.

There are also many discounts offered by different insurance companies so look for those discounts to help reduce your policy costs. Some examples: Gated Community/On-site Security, Firewise Certification. Protective Device (i.e., smoke/Carbon monoxide alarms), Mature Policy owner, and Multi-Policy (with the same insurance company).

In the next articles in this series of three, we will examine the details of what you need in your personal HO6 Insurance Policy. Future articles will discuss how the Association is addressing the current Insurance Crisis.

The Association Board of Directors (ABOD) appreciates the need in having your questions answered. The Ask the ABOD column provides a forum where all those interested can see the question and response. If you have any questions, please email them to Liz Ramos at LRamos@the-villages.com or drop them in the drop-box in the parking lot of Building A.

The entire Board is interested in communicating the proper information for your understanding of issues and current events.

Question from Ed Logg:

I recently learned that Fairways, Del Lago and Sonata have a separate insurance policy from the other villages.  At one time this idea was suggested but we were told it was not feasible.  I am glad to hear that it is indeed possible although it came as a complete surprise.

I would like to know how much less this new policy is for these villages compared to the other villages in both the dollar amount and the percentage of the cost.  Also, most importantly, what is it about these villages that allows us to get reduced rates?

Answer from the ABOD

Thank you for your question about the insurance coverage for Fairways, Del Lago, and Sonata. Here’s a concise explanation of the situation: Yes, Fairways, Del Lago, and Sonata do have a separate insurance policy from the other villages. This arrangement was made possible after careful consideration of various factors, and it aligns with the unique characteristics of these districts.

 Cost Comparison:

• Premium Rate Comparison: The new policy for these districts offers more favorable rates due to lower risks associated with the properties. On average, the new policy is significantly less expensive per square foot compared to other districts, with rates approximately 55% lower. Specifically, RT Specialty Brokers (the non-admitted multi-layer property insurance placement) charges $0.51 per $100 of property value, while the Philadelphia (the admitted property insurance placement) Insurance policy for these districts is at $0.23 per $100 of property value. This difference is a result of better loss experience and stricter underwriting requirements by Philadelphia Insurance.

Reason for Reduced Rates:

• Risk Factors: The lower insurance rates for these districts are primarily due to two main factors:

• Brush Score: These districts have lower brush fire risk scores, which makes them less susceptible to wildfire-related claims.
• Property Value Limits: The insurance carrier, Philadelphia Insurance, was able to offer these lower rates because their reinsurers limit the maximum property value they are willing to cover, and the property values for these districts fall within those limits.

 This tailored insurance approach allows these districts to benefit from reduced premiums while ensuring comprehensive coverage that meets their specific needs.

If you have any further questions, please feel free to reach out.

Question: Howard Blumstein recently pointed out that the FY25 $47.55 increase in the monthly assessment generates an additional $1,447,042 in Club revenues over the previous year. The Major Expense Categories increase shown in the FY25 budget documents as approved by the Club Board is $1,025,042. Why was an additional $422,000 in revenues needed?

CBOD Response: We are correcting the allocation of labor cost to the appropriate category. In recent years the cost of our staff labor and overhead has been allocated to capital projects not operating expense. Based on last year’s audit recommendation we have corrected this practice so that in the future all labor related expenses will appear as an operating expense.

The additional $422,000 in revenues beyond the major expense increases is primarily due to the reallocation of wages and overhead from the capital budget to the operating budget, and general increases in operating expenses such as insurance which increase by 27% or $51,900 and other non-capital equipment. The edited recap of the FY25 budget in the accompanying table includes the wages and overhead. The increase matches the major category expenses.  It is important to note that the $422k figure represents a combination of both operating dues and capital replacement contributions.

Thank You for your question highlighting an important change in our accounting practices.