Unit 9 Quiz - Associations and Insurance

Chapter 718 of Florida Statutes requires community associations to adequately insure property for its actual value.

This type of coverage protects against direct damages to covered property caused by windstorms and hail. Think of it as covering the damage from a strong wind or hailstorm.

This coverage is essential for protecting the association from financial liability for injuries or property damage caused by their actions or negligence.

Often referred to as excess liability coverage, this type of insurance provides additional protection when the limits of primary liability insurance have been reached. Think of it as an extra layer of protection for unexpected large claims.

This coverage protects against breakdowns in equipment like heating systems and machinery caused by malfunctions, power surges, or failures. Think of it as a safety net for sudden equipment problems.

This type of insurance reimburses the association for losses incurred due to dishonest acts by employees like embezzlement or theft. Think of it as protecting against financial loss caused by employees who may act dishonestly.

This policy covers the association if an employee has an accident while driving their personal vehicle for work purposes.

The association's board of directors has a fundamental responsibility to protect the assets of the association, and this includes ensuring adequate insurance coverage for all areas of potential risk.

The association must define its insurable interests - what is being insured and why - and these details should be documented clearly in its governing documents.

The association's governing documents, which include the declaration of covenants, conditions, and restrictions (CC&Rs), bylaws, and articles of incorporation, typically outline the parameters of required insurance coverage.

This policy covers only the risks specifically named in the policy. Think of it as limiting coverage to a specific list of perils.

In the event of major damage to the property, the board should contact the community association manager, their legal counsel, and potentially an accountant to navigate the situation effectively.