VI. Insurance and Casualty Losses

6.1. Association Insurance

  1. Required Coverages. The Association, acting through its Board or its duly authorized agent, shall obtain and continue insurance covering the Townhome Units and the Area of Common Responsibility, if reasonably available, or if not reasonably available, the most nearly equivalent coverages as are reasonably available.

    1. Townhome Units. The Association shall obtain blanket property insurance covering the full replacement cost of all insurable improvements which the Association is responsible to maintain, including without limitation, the Common Area and the original construction of individual Townhome Units; provided, however, the Association’s insurance shall not include the Townhome Unit Owner’s personal property or improvements and betterments made by Townhome Unit Owners (which shall be the sole responsibility of the Townhome Unit Owners). The property insurance shall provide at a minimum, fire and extended coverage, including vandalism and malicious mischief. The Board may purchase “all-risk” coverage in like amounts.

    2. Area of Common Responsibility. The Association shall obtain commercial general liability insurance on the Area of Common Responsibility insuring the Association and its Members for damage or injury caused by the negligence of the Association or any of its Members, employees, agents, or contractors while acting on its behalf. If generally available at reasonable cost, the commercial general liability coverage (including primary and umbrella coverage) shall have a limit of at least One Million and No/100 Dollars ($1,000,000.00) per occurrence with respect to bodily injury, and property damage; provided, should additional coverage and higher limits be available at reasonable cost which a reasonably prudent person would obtain, the Association shall obtain additional coverages or limits.

    3. The Association shall also obtain such other insurance such as workers compensation, directors and officers liability coverage, and fidelity insurance as the Board, in the exercise of its business judgment, determines advisable.

  2. Policy Requirements. The Association shall periodically review the sufficiency of insurance coverage. All Association policies shall provide for a certificate of insurance to be furnished to the Association and, upon written request, to any Member. The policies may contain a reasonable deductible. In the event of an insured loss applicable to the Area of Common Responsibility, the deductible shall be treated as a Common Expense and in the event of an insured loss applicable solely to the Townhome Units, the deductible shall be treated as a Townhome Unit Assessment applicable to Townhome Unit Owners; provided, if the Board reasonably determines, after notice and an opportunity to be heard in accordance with the By-Laws, that the loss is the result of the negligence or willful misconduct of one or more Owners, their occupants, guests, invitees, or lessees, then the Board may levy a Specific Assessment of the full amount of such deductible against such Owner(s) and their Units.

The Board is hereby authorized to obtain the insurance policies and coverage(s) specified in this Declaration through the Declarant and reimburse the Declarant for the cost thereof. Insurance obtained by or through the Declarant shall satisfy all insurance responsibilities of the Board.

All insurance coverage obtained by the Board shall:

  1. be written with a company authorized to do business in the State of Georgia which satisfies the requirements of the Federal National Mortgage Association, or such other secondary mortgage market agencies or federal agencies as the Board deems appropriate;

  2. be written in the name of the Association as trustee for the Owners, who shall be insured under such policy to the extent of the Owners’ interest;

  3. not be brought into contribution with insurance purchased by Owners, occupants, or their Mortgagees individually;

  4. contain an inflation guard endorsement; and

  5. include an agreed amount endorsement, if the policy contains a co- insurance clause.

In addition, the Board shall use reasonable efforts to secure insurance policies which list the Owners as additional insureds and provide:

  1. a waiver of subrogation as to any claims against the Association’s Board, officers, employees, and its manager, and the Owners and their tenants, servants, agents, and guests;

  2. a waiver of the insurer’s rights to repair and reconstruct instead of paying cash;

  3. an endorsement precluding cancellation, invalidation, suspension, or non-renewal by the insurer on account of any one or more individual Owners, or on account of any curable defect or violation without prior written demand to the Association to cure the defect or violation and allowance of a reasonable time to cure;

  4. an endorsement requiring at least 30 days’ prior written notice to the Association of any cancellation, substantial modification, or non-renewal; and

  5. across liability provision.

  1. Damage and Destruction - Common Area. Immediately after damage or destruction to all or any part of the Community covered by insurance written in the name of the Association, the Board or its duly authorized agent shall file and adjust all insurance claims. Any damage to or destruction of the improvements on the Common Area shall be repaired or reconstructed unless the Members representing at least sixty-seven percent (67%) of the total votes in the Association, and the Declarant, so long as Declarant owns property described in Exhibits “A” or “B,” decide not to repair or reconstruct. If the Association determines that the damage or destruction to the Common Area shall not be repaired or reconstructed and no alternative improvements are authorized, the affected property shall be cleared of all debris and ruins and thereafter shall be maintained by the Association in a neat and attractive, landscaped condition consistent with the Community-Wide Standard.

    Any insurance proceeds remaining after paying the costs of repair or reconstruction, or after such settlement as is necessary and appropriate, shall be retained by and for the benefit of the Association and placed in a capital improvements account. This is a covenant for the benefit of Mortgagees and may be enforced by the Mortgagee of any affected Unit.

    If insurance proceeds are insufficient to cover the costs of repair or reconstruction, the Board of Directors may, without a vote of the Members, levy a Special Assessment to cover the shortfall.

6.2. Individual Insurance - Townhome Units

To the extent not insured by the Association as provided in Section 6.1 above, each Owner of a Townhome Unit shall obtain and maintain in effect at all times: (i) property insurance for the full replacement cost, less a reasonable deductible, of all insurable improvements, contents, and personal property contained in his or her Townhome Unit; and (ii) insurance covering consequential damages to any other Townhome Unit or the Common Area due to occurrences originating within the Owner’s Townhome Unit caused by the negligence of the Owner, the failure of the Owner to maintain the Townhome Unit, and any other casualty within such Owner’s Townhome Unit which causes damage to the Townhome Units or the Common Area.

Within ten (10) days of any written request from the Board of Directors, each Owner shall file with the Association a certificate from the insurer evidencing the insurance coverage required hereunder and, if requested, a copy of the individual policy or policies covering his or her Unit. Such Owner shall promptly notify the Board in writing in the event such policy is canceled.

6.3 Individual Insurance - Detached Units

By virtue of taking title to a Detached Unit subject to the terms of this Declaration, each Owner of a Detached Unit acknowledges that the Association has no obligation to provide any insurance for any portion of individual Detached Units and each Owner of a Detached Unit covenants and agrees with all other Owners and with the Association that each Owner of a Detached Unit shall carry all-risk casualty insurance on the Detached Unit and all structures constructed thereon and liability policy covering damage or injury occurring on the Detached Unit. The casualty insurance shall cover loss or damage by fire and other hazards commonly insured under an all-risk policy, if reasonably available and shall be in an amount sufficient to cover the full replacement cost of any repair or reconstruction in the event of damage or destruction from any such hazard. The policies required hereunder shall be in effect at all times.

6.4 Damage to Units

Neither the Association, the Declarant nor the officers, directors or agents of any of them shall bear any responsibility for the maintenance or safekeeping of personal property of any Owner or occupant of a Unit (Townhome Unit or Detached Unit), their family, occupants, guests, or invitees, nor shall the Association, Declarant or the officers, directors or agents of any of them be held liable for the conditions of, or any loss or damage to, any such personal property except to the extent directly attributable to the reckless acts or willful misconduct of the Association, Declarant, or their respective agents or employees.