Earthquake Insurance for Homeowner Associations
It is the policy of most HOA management companies to recommend the purchase of earthquake insurance. While most boards have the authority to decide whether to purchase earthquake insurance, it is wise for boards who have such authority to permit the overall membership an opportunity to vote on this important issue unless the board decides to acquire such coverage. If a board is opposed to obtaining earthquake insurance coverage, they should always permit the overall membership to vote on the matter in order to minimize their personal liability. Such liability can result from an earthquake that results in damages.
It is important to be aware that many Directors and Officers Liability Policies (Errors and Omissions Coverage) do not cover directors and officers for their failure to obtain correct or adequate insurance coverage.
The results of any vote taken concerning the issue of whether to purchase earthquake coverage must be noted in the minutes and also filed in a separate folder, properly labeled and filed in the section "Elections".