The Red Dog is Coming! The Red Dog is Coming! Said Ardell and Paul Revere.

The big question is: To Clean or not to Clean?

January 29, 2006 is the first day of the Chinese New Year. We will be entering “The Year of the Red Dog” aka Fire Dog. Do you want that big red dog in your house, or not? If you do, you have to start cleaning right now and make way for him. He won’t come in to dusty, dirty houses, or so the story and Feng Shui principles go. But maybe you don’t want to clean. Maybe you don’t want that big red dog in your house for all of the New Year.

I’m cleaning! I can’t wait to get rid of last year’s Rooster. But what about you?

Do you have a cause you need to get support for? If so, you want to welcome that Dog in to help Champion your causes. But as Morgan Freeman said in Se7en “Not everyone wants a Champion. Most people want to eat hamburgers, play the lottery and watch TV. ” If you’re one of those people, then spend the next 5 days making a big mess and tell that doggy to go to someone else’s house.

If you own a condo, even if you have owned it for many years, it is a good time to check on your Hazard Insurance. What you want to note from the Insurance “Dec” Page, is the amount of the deductible. These days, relying on the Home Owner Association’s policy solely, for your Hazard Insurance needs, may not be good enough. In fact, it may not cover you at all for most of your needs, even if it once did.

A major change occurred after 9-11. The Insurance Industry, having paid out some major claims, raised their prices on HOA Insurance policies, more-so than in some other areas. In order to keep costs down and monthly condo fees stable, many Home Owner Associations drastically increased the deductible amount in the insurance policy. So you may not be as protected as you think, or even as you once were. Deductibles that were once commonly $1,000 per claim, climbed first to $2,500, then to $5,000 and in some cases as high as $10,000.

Real Estate Agents should not be telling you “You don’t need Hazard Insurance because the HOA takes care of that”. If you live in a third floor condo and stuff your washer with too many clothes and go to work and it overflows down to the condo below you, are you covered by the HOA policy? Or will you have to pay the downstairs neighbor for the damage out of your pocket? If your hot water tank blows and floods not only the downstairs neighbor, but your two next door neighbors, and the damage is $8,000 and the deductible on the HOA policy is $10,000, where does that leave you?

Here’s what you should do. Get the current “Dec” page for the HOA policy. You should be getting this annually, though you probably throw it away or stick it in a drawer. It looks like a form with lots of blocks and numbers on it and should say something like “Declaration of Insurance” (commonly known as “Dec (deck) Page”. Take that page to your insurance agent, or contact the company who provides the HOA insurance, and ask for a quote for a “supplemental policy” that covers you for the things the HOA does not cover and reduces the deductible. Get quotes for a $500 deductible and a $1,000 deductible.

Even if your Condo Association has a low deductible, you should have a supplemental policy to cover your belongings and your own negligence items, like overflowing washing machines.

While you may not need anything besides the HOA Dec Page to close escrow, that does not mean you do not need your own Hazard Insurance Policy just because it is not an escrow requirement. It never did, really. But today it is even more likely to be grossly insufficient than it was in years past.

If you are on the Board of Directors of a Home Owner Association, the Board should send a notice to owners regarding the increase in the deductible amount, along with a recommendation that they all go out and obtain their own supplemental policies. If everyone has a supplemental policy, the HOA is less at risk for claims and lawsuits. Reducing risk helps everyone keep their condo fees down. The supplemental policies of the owners should cover small claims, and the HOA Policy should be used only for fires or major incidents that affect more than just a few owners. One person’s claim on the HOA policy, instead of their own policy, increases everyone’s costs and dues.

Moving away from relying solely on the HOA policy, is in everyone’s best interest. If too many claims are filed against the HOA Policy and the insurance company “drops” you, you being the entire Association, everyone suffers.

Giles wrote: “Ardell showed us quite a new (yet simple) trick…. Write half a post, and then have a call to action for comments or you don’t get the second half. Simple and brilliant! “No Soup For YOU!!….Next!!!

I’m not familiar with the laws on eminent domain in Washington State, but an article in the New York Times about new laws to limit eminent domain struck me as interesting. Eminent domain law means a lot to folks involved in real estate as it is often used to dramatically overhaul neighborhoods. It is almost unquestionable that it is a necessary evil, but the specific rules and regulations around it can get into sticky issues like declaring an area “blighted” and condemning low income housing.

The outcry has given heart to property-rights advocates. “We lost the Supreme Court case, but we’re ultimately going to win in changing the way that eminent domain is going to be used in this country,” said Dana Berliner, a senior attorney for the Institute for Justice, the most prominent advocacy group.

Eminent domain is important, though:

But around the country, developers and city officials say weakening or destroying the power to condemn property will seriously undermine efforts to rehabilitate decaying cities and might even hinder the rebuilding of New Orleans. Without eminent domain, the Inner Harbor, which played an essential role in Baltimore’s success in building its tourist industry, could not have been redeveloped, said Ralph S. Tyler, the city solicitor.

If Washington doesn’t act to justify or tweak the eminent domain process, I’d put decent odds on a Tim Eyman-backed initiative to restrict eminent domain law. Ohio is ahead of the game:

In a more cautious vein, Ohio has effectively denied state funding for one year to private projects in nonblighted areas that involve condemnation. The state also created a bipartisan task force to study the issue. “Ohio is saying, ‘We need some breathing space,’ ” Mr. Morandi, of the National Conference of State Legislatures, said.

It’s really too bad that most state governments don’t follow this cautious approach instead of reacting once a situation goes bad.

I suggest consulting David Pogue’s How to Be a Curmudgeon on the Internet for suggestions on how to comment on posts. The comments at Rain City Guide have been far too civil and substantial.

-Galen
ShackPrices.com