CAI-NJ Sept.2017(1)

S E P T E M B E R , 2 0 1 7

Courtesy CAI-NJ.

Vinnie Hager is the President of JGS Insurance located

in Holmdel, NJ. Vinnie has specialized in insuring

Common Interest Communities for 28 years. He is a

past President of CAI-NJ, and has spoken both locally

and nationally regarding the unique insurance issues

relative to Community Associations.

ecently, I had the privilege of being selected to join

the CAI-NJ Legislative Action Committee (LAC). Aside

from the Managers Committee (which I would be

happy to serve but am a little short on my credentialsJ), this

was the only committee within CAI-NJ on which I had not

previously served. It has been an eye opening experience

to serve on this committee. You should understand the

amount of work and effort that the volunteers of the LAC

put into serving common interest communities interests. The

legislative agenda is daunting each month, and they do it

willingly and on their own time. I am honored to be work-

ing with such a dedicated group of professionals.

I wanted to bring to your attention three bills that affect

Insurance and the common interest communities that you

need to be aware of going forward.

First is

A3683.

This bill was introduced by Assemblyman

Daniel R. Benson out of District 14 (Mercer and Middlesex).

This bill prohibits condominium associations from assessing

insurance deductibles to individual unit owners or groups

of unit owners. This bill is problematic to community asso-

ciations and was opposed in its current form. The ability

of community associations to assess unit owners for large

COMMON INTEREST COMMUNITY

LEGISLATION AFFECTING

INSURANCE

By Vincent J. Hager, CIRMS,

President,

JGS Insurance

deductibles is an essential tool that boards must be able to

utilize. There are many deductibles in an insurance policy.

It is not uncommon for an Association to have a $5,000

primary deductible, a $5,000

per unit

water and ice dam

deductible, $100,000 earthquake and flood deductible,

as well as many others. If an association were to have

a $5,000 per unit water deductible, and the unit on the

4th floor has a pipe break that causes damage to the 3

units below, the association would have $20,000 applied

toward the deductibles. If you remove the ability to assess

unit owners to collect the deductible, then second mortgage

lenders such as FANNIE MAE, will want to see reserves in

the current budget to fund all of those deductibles in order

to qualify for their mortgage lending.