Regarding Liability and Insurance

Hi Everyone-

I have some new information to share that I think we will all benefit from knowing.

One of the biggest objections or concerns I am hearing is the issue of liability and the cost of insuring a pool. Apparently this has been the biggest issue that has come up in past attempts to get a pool (or so many of us have been led to believe).

I contacted a commercial insurance agent with Barnard-Donegan today (Chris Stansel). He has had extensive experience in underwriting policies for HOAs such as ours. What he told me really surprised me considering that the board members at our last meeting kept citing insurance costs as a kill factor for a pool.

Chris explained to me that most HOAs (or POAs) already have a liability policy in place (and yes, The Pinnacle does too), especially if the neighborhood has any kind of amenities. If a neighborhood should decide to build a pool, it will add approximately $100 per year to the existing policy.

This sounded ridiculously inexpensive to me, so I asked more questions and here is what I found:

A typical liability insurance policy for HOAs will include around $1 million in coverage. This generally covers accidents, injuries, etc…related to neighborhood-owned amenities. If someone gets hurt playing tennis on our courts and sues, then this policy would cover it.

Surprisingly, these types of policies are not very expensive (The Pinnacle paid $3,637 in 2009) – and here is why: As members of a POA, we are OWNERS. We not only own our homes or lots, but we also own the amenities in our neighborhood. Therefore, the liability insurance policy does not cover injuries, accidents that happen to owners…..because YOU CANNOT SUE YOURSELF.

So what is the purpose of having an insurance policy? It is to cover the liability where non-owners (guests) are concerned. In simple terms, if you (an owner) get hurt playing tennis on the neighborhood courts, the neighborhood is not liable because you cannot sue yourself. However, if you bring a guest to the tennis courts and he/she get hurt, he/she CAN sue The Pinnacle (YOU). In that scenario, our insurance policy would pay. Because the majority of amenity usage is by owners, the policy premiums stay low.

The addition of a pool is simply the addition of an amenity and does not significantly impact insurance premiums. There ARE certain things that need to be done with the pool in order to “CYA” (aka: reduce liability). These are such things as signage (“Swim At Your Own Risk”, etc…), self-locking gates, fencing, depth markers, etc…

I also asked if having a lifeguard impacted insurance rates at all and the answer is “no”.

I don’t know about you all, but I find this entire bit of information extremely interesting. It is very apparent that in the past, no one has actually researched the insurance cost of a pool and just assumed the liability was just too great. At this last POA meeting each board member kept “pooh-pooh”-ing the idea of a pool, mainly giving the reason insurance costs would increase too much. Well, that is obviously incorrect and this is something that we need to make sure and address when the question comes up during the surveys.

Action Plan/Facts/Hurdles

PINNACLE POOL EXPLORATION COMMITTEE

Mission: To explore the possibility of building an accessible neighborhood pool for The Pinnacle

Facts:

1.       POA board has historically been against a pool but has never seriously explored the idea.

2.       According to POA, an environmental study was done and a pool is not possible in the quarry area due to its proximity to the aquifer.

3.       Approximately 250 properties in The Pinnacle

4.       POA dues = $125 per year

5.       Currently approximately $60K in bank account

6.       In order for any changes to be made to dues, or anything to be built in the neighborhood, 2/3 of ALL PROPERTY OWNERS would have to vote FOR it.

7.       Currently ALL neighborhood amenities are only easily accessible by Quarry Point via Hoffman Ln.

Hurdles:

1.       Funding

2.       Support of property owners (2/3 vote)

3.       Location (environmental impact, accessibility)

4.       Liability

Action Plans:

1.       Canvassing – contact each property owner to determine interest/support level

a.       Develop short questionnaire (also collect contact info – could be used for directory?)

b.      Recruit committee members/helpers

2.       Research –

a.       Come up with wish list – (best case and lowest-budget scenarios)

b.      Contact pool companies/contractors, etc…to get bids and determine approximate costs to build

                                                               i.      Utilize property owners’ expertise/knowledge/experience

c.       Contact other POAs to ask what their building/maintenance costs are

d.      Determine liability issues and how to overcome them (attorney? Insurance company?)

e.      Comparable neighborhoods, properties sold, price per square foot. Do neighborhood amenities have an impact?

f.        Contact other neighborhoods to ask how they funded amenities. Memberships? Stocks?

3.        Explore Funding Options –

a.       Raising dues

b.      Assessments

c.       Cost threshold for property owners

d.      Sell memberships – invite other neighborhoods, make it public

                                                               i.      Rolling Oaks, Country Hills, etc…

e.       POA transfer fees – one of the only neighborhoods that does not charge this (typically $100-$200)

4.       Location –

a.       Does an environmental study exist? Ask to see it.

b.      Make quarry more easily accessible to the neighborhood.

                                                               i.      Easements? Bike paths?

c.       Lots currently for sale.

d.      Empty lots – contact owners.

Welcome

Hello Neighbors!  You have arrived at The Pinnacle's spot on the Web, created by a group of owners who want to see us get a neighborhood pool. We have a mission, we have a plan and we have the DRIVE to get this done. What we now need is manpower. A short meeting was held on August 8th to discuss the direction we will take to get this off the ground. Our first task is to determine exactly what kind of support we will get from the neighborhood. Below is the text of the email I sent out to those who initially wanted to be involved:

Hi Everyone-

We had a small committee meeting on August 8 where we discussed the pool issue and what needs to be done to proceed further. I am attaching what I had outlined in our meeting so you can see the various points and hurdles we have to address in order to be successful in this venture.

At this time, we have decided our best plan of action is to first conduct a canvass of the neighborhood (on foot, in person…yes…door-to-door) to determine whether or not we will have enough support from owners if and when the issue of a neighborhood pool goes to a vote.

Each of you has expressed a desire to help, so this is definitely your opportunity!! We need MANPOWER for this to be accomplished in a timely fashion. It will be ideal to take advantage of our hot weather to discuss a neighborhood pool J

What I ask of you is to drum up some help. If each of us can get another 1-2 volunteers (more if possible) to help conduct this survey, we should be able to accomplish this fairly quickly. (I would ask only those neighbors you think would be in support of a pool, obviously!) It will not be a lengthy survey, just some simple questions to determine if we have enough support. Remember, if this issue goes to a vote, we will have to have 2/3 in favor, or it is dead in the water. I do not want to waste mine or anyone else’s time on this if we can’t get the support needed.

So please, get yourself a few volunteers together and plan on getting some exercise! I will be in touch shortly with the survey questions and which houses you (and your volunteers) will be responsible for hitting up. There are approximately 250 properties in the neighborhood and I will contact lot owners myself to find out their opinions. As for those homes that are up for sale…my general feeling is that they would be in favor, simply because #1 it makes the neighborhood more attractive to buyers and #2 if they are successful in selling, it won’t affect their pockets!

I would like to start the canvassing on or around next Saturday, August 28 and have it completed by Sunday, September 12. That will give us 2 full weeks to complete it and remember, it does not have to be done only on a weekend – weeknights are probably the best time in fact. There are 12 of us on this email list – if we can all get just 1 other person to help, that will be only 10 owners to contact (give or take a few). This is definitely do-able.

Thank you so much for your help and support. I will be in touch soon with the survey. If you have any questions, don’t hesitate to call me at 210-313-0409.

Have a great weekend!

Stacy Berry

thepinnaclenb@gmail.com

This outlines where we currently stand. We need volunteers for our canvassing - please contact me if you can help!