Carnelian Woods was finally able to obtain, at about the eleventh hour, fire/property insurance with the California FAIR plan (CFP), the insurer of last resort. We will not yet know the final cost and if they will cancel the insurance until they do a site visit, probably in May. CFP has our property as a low wildfire risk (while the industry rates our property as 93 out of 100 risk) and are aware of the ongoing repairs, but repairs are an item that explicitly will cause the policy to be retroactively cancelled. The emergency board meting on March 28 was to approve this and the other insurance policies.
The coverage is only actual cash value limited by the CFP to $20,000,000, and we will add another policy for a total ACV coverage of $25,000,000. Lenders and the CC&Rs require replacement cost coverage, with replacement cost estimated to be about $56,000,000. We are covering the difference by requiring that homeowners ensure they have a loss assessment rider for $50,000 or more on their HO-6 policy. Should the association suffer a loss that exceeds its insurance coverage and needs to assess the homeowners, this rider covers the payment of the assessment.
It is not entirely clear how lenders will respond to this fire/property coverage as it is actual cash value rather than replacement cost. Replacement cost coverage, if it is even available, was projected to cost $1,000,000 yearly, more than double our entire current operating budget–over $8,000 per owner per year. Lenders tend to have a way of finding or forcing coverage and may yet find solutions which we have not. We are still looking at additional avenues for
