Owners enouraged to increase Homeowners Policy

The board was only recently made aware of its insurance options for 2024-2025. All involve a significant increase in the deductibles. The policy, just elected by the board, goes into effect tomorrow, November 1. To protect yourself from a potentially costly special assessment following a catastrophic event, it is highly recommended that you increase the "loss coverage" rider on your individual homeowners' policy to $50,000. Your cost will likely be less than $5/month for this additional coverage. The higher deductibles on the Master Policy go into effect this Friday (tomorrow).

1. What is my financial risk?

In the worst case, if a tornado like the October 2019 EF3 in North Dallas were to pass through our community (see photo, top of page), we could each face a special assessment of $30,000 to $45,000 (depending on the floor plan).

If we had a freeze and power grid failure, such as we experienced in February 2022, we could each face a special assessment between $4,200 and $6,500.

If we had a hailstorm, like we experienced at LoBT in April 2024, we would each face a special assessment in the $1,200 to $1,800 range.

2. How will a loss coverage rider help me?
Your homeowners’ policy would pay your special assessment up to the limit of your coverage (e.g., $50,000).

3. What are the alternatives?

The Association could purchase a Lloyd's of London policy to lower the deductible. With a Lloyds policy, our individual financial risk would be reduced as follows:

• Tornado example: $30,000/ $45,000 drops to $16,000/$25,000
• Power grid example: $4,200/$6,500 drops to $1,200/$1,800
• Hailstorm example: $1,200/$1,800 does not change

Spending $5.00/month for "loss coverage" on personal insurance policies rather than add $170 - $250 to the monthly dues for a Lloyd's policy was preferred by the board and the 20 homeowners providing informal feedback.

4. Why are the LoBT deductibles so high?

Our property and general liability insurer quit us. Princeton Insurance Company elected not to renew our policy because of lawsuits and damage claims. Princeton, new to Texas since 2021, is currently one of the better insurers. Princeton determined the LoBT loss runs to be unacceptable. This is because of the weather. It is because of lawsuits. LoBT Boards for the last 20+ years have had to deal with frivolous lawsuits.

As in previous years, other brokers were contacted, and they expreswed frustrations with the market and advised that we best stay with Princeton.

Risk Theory, our second choice this year after Princeton, declined to bid.

In the best cases, insurance costs have been rapidly rising as traditional insurers have left the North Texas market due to high claims. Most everyone is paying more for less. The LoBT insurance costs have escalated from $60,000 annually to $265,000 in the last seven years, and the deductibles have also increased. LoBT has changed insurers numerous times to manage costs.

5. Where do we go from here?

The board will explore the possibility a mid-term policy switch if better terms can be found. It is not likley we will find an equivalent policy to what we had with Princeton. We may find some improvement on the 2024-2025 policy. LoBT is financially bound to the new 2024-2025 policy until March.