COLUMN: Barbara Holland

Q. Our association consists of 23 units. We had a fire in one of the units. Our insurance company dropped our coverage.

The insurance covered the shell of each home. We were paying $4,000 per year and now our property manager informs us that the cheapest insurance that they can find will cost us $28,000.

Is there some regulatory agency that prevents insurance companies from doing something so outrageous? Does belonging to an association prohibit individuals from obtaining their own fire insurance? Can you please list insurance companies for homeowner associations?

A. The unfortunate reality is that insurance is costing associations more and more money each year -- in many cases, regardless of whether or not there have been any claims against the insurance policy.

Many insurance companies blame the multiple construction defect lawsuits that have been initiated in Nevada. Others blame the Nevada Legislature for not passing laws that would make it more difficult to sue certain types of professions or industries.

There have been a number of insurance companies that offered competitive rates and no longer offer insurance in Nevada. The trends that we have seen are not only increased premiums, but fewer insurance companies and changes in policies to decrease coverage.

Different insurance companies offer different types of products and in some cases are more competitive in particular areas of town. Some brokerage houses offer better rates for associations than others.

The bottom line is that your association may have to contact the company-type insurance companies, such as Farmers or State Farm, and then contact one good insurance brokerage firm. You want to avoid competing against yourself if too many insurance agents are contacting the same companies.

Unfortunately, there is not too much the state can do. This is free enterprise.

You may want to contact the governor's office to see if there are any special committees working on this issue to help attract affordable insurance to Nevada.

Questions for Barbara Holland may be sent to Association Q. & A., P.O. Box 7440, Las Vegas, NV 89125. Her fax number is 385-3759.

Barbara Holland, Certified Property Manager, is president and co-owner of H&L Realty and Management Co. She is a member of the Institute of Real Estate Management and is the author of two books on the subject. Holland is a past president of the Greater Las Vegas Association of Realtors.

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