Real Property Law

Cal. Real. Prop. Journal VOL. 40, NO. 3, 2022



The California Insurance Crisis. By Kimberly Lilley, Esq.:

For Those Who Are Not Aware, the California Insurance Market Is in Crisis. Common Interest Developments (CIDs), Most Commonly Condominiums, Are Not Only Paying Impossible Premiums for Property Insurance, but Some Cannot Get Coverage AT ALL, or Not to the Full Coverage Requirement in Their Conditions, Covenants and Restrictions (CC&R). This Puts the Boards of Directors in Direct Violation of Their CC&R, and Therefore at Heightened Risk for a Claim on Their Directors & Officers Liability (D&O) Policy (Professional Liability Coverage for the Decisions Made – and Not Made – by the Association’s Board of Directors). …

Choosing Not to Insure Brings with It Not Only the Increased Risk of D&O Claims Already Mentioned, but Also a Lack of Financing for Those Looking to Buy into the Association. Fannie Mae and Freddie Mac Notoriously Have No Desire to Back Loans Where an Association Is in Violation of Their Governing Documents, ESPECIALLY the Insurance Provisions. …

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