Minnesota townhome association insurance: roof coverage and deductibles

Compare what your association would pay after a roof loss

If your Minnesota townhome association receives a lower master-policy quote, ask what changed in the roof coverage and deductible before the board chooses it. The premium is one part of the cost. The terms determine how much the association may retain after a covered loss.

BIG can review the current policy and renewal proposal with your board or property manager. This guide addresses the association’s master policy, not an individual homeowner’s policy.

What does the quote say about roof settlement?

Ask whether covered roof damage is settled on a replacement-cost basis, an actual-cash-value basis or another schedule. Review the endorsements as well as the declarations. Age-based limitations, exclusions and conditions can affect the amount payable even when two proposals show the same building limit.

Give the broker roof installation dates by building, details of partial replacements and any inspection reports you have. If a project is scheduled but not completed, describe it accurately. Do not submit a planned improvement as completed work.

What value does a percentage deductible use?

A percentage alone does not tell your board its possible share of a loss. Ask which insured value the percentage applies to, whether there is a minimum deductible, and whether the deductible applies per building or per occurrence.

For illustration only, 2% of a $2 million insured value is $40,000. That arithmetic does not establish your association’s deductible. The policy may use a different value or application method, so ask the broker to calculate the quoted deductible using your actual building schedule.

Which property is the association responsible for insuring?

Bring the declaration, bylaws and current policy. Shared roofs, walls and other building components deserve a clear review of the association’s responsibilities under its documents and applicable Minnesota law. Avoid assuming the same insurance arrangement applies to every townhome community.

Any decision about allocating a deductible or assessment should be checked against the governing documents and applicable law with the association’s advisers. An insurance comparison alone does not resolve that legal question.

Ask for a comparison the board can use

Request the annual premium and fees, building limits, roof settlement provisions, applicable deductibles and significant exclusions in the same comparison. Identify any inspection or repair conditions that remain before coverage can be bound.

If your property manager has already shopped the policy, share the insurers approached and their responses. BIG can discuss whether other suitable options are available and help the board understand the tradeoffs in the proposals.

Send the current policy and the renewal date

Start with the association’s name, location, unit count and renewal timing. Include your role on the board or management team. Call (612) 712-6407 or request a master policy review so we can follow up for the building and roof records.

See Minnesota HOA and condo association master policies and how to compare association insurance options. Actual coverage depends on policy wording, underwriting and the association’s circumstances.