CC&R ARTICLE 06: INSURANCE
6.1 Coverage. As a common expense, the Association shall maintain a policy or policies of insurance and bonds at all times to provide:
6.1.1 Liability. Insurance against liability incident to the ownership and use of the condominium for personal injury and property damage with limits of not less than $2,000,000 for each occurrence. Liability insurance shall include medical payment insurance in the amount determined by the Association.
6.1.2 Worker's Compensation. Worker's compensation insurance to the extent required by applicable law.
6.1.3 Personal Property. Insurance against loss of personal property of the Association by fire, theft and other losses in amounts and with deductibles as the Association deems advisable.
6.1.4 Fidelity Bond. As insurance, a fidelity bond or bonds with the Association as obligee for officers and agents of the Association handling its funds. For each officer and agent of the Association and for each other person who is responsible for the funds of the Association or for funds on behalf of the Association, a fidelity bond shall be maintained in an amount deemed advisable by the Association but in any event not less than the aggregate amount equal to the semiannual assessments payable to the Association plus the amount of any reserves of the Association.
6.1.5 Other. Such other insurance as may be required by law or as the Association deems advisable. Since the common areas do not include any improvements which may be insured against loss or damage to real property, no such insurance is required for the Association. The improvements made within the units by each unit owner shall be insured by the unit owner. Each unit owner shall be an insured person under the liability policy with respect to liability arising out of the owner's interest in the common elements or membership in the Association. Each insurer shall waive its right to subrogation under its policy against any unit owner, member of the owner's household, and lessee of the owner. The insurance shall provide that it is the primary insurance in the event that there is other insurance in the name of a unit owner. All insurance policies shall provide that the policy may not be canceled by the insurer without ten days' prior notice to the Association and the mortgagees scheduled in the policy. No insurance against property loss or liability shall be required of the Association to insure the contents of a unit, an event occurring within a unit, or any improvement which the owner of a unit may make within the unit. Such excluded coverage shall be the responsibility of each unit owner with respect to that owner's respective unit. Neither the Association nor the condominium shall have any interest in insurance or proceeds of insurance on improvements within a unit.
6.2 Proceeds. Insurance proceeds for damage to personal property shall be paid to and belong to the Association which shall not be required to segregate such proceeds from other funds of the Association or hold the proceeds as trustee for unit owners. No lienholder shall have any right in such proceeds. No unit owner or lienholder shall be entitled to receive payment of any portion of the proceeds unless there is a surplus of proceeds after the damaged property has been completely repaired or restored or the condominium is terminated. Insurance shall not be payable to any mortgagee. The Association shall have the authority to settle and compromise any claim under insurance obtained for the Association, and the insurer may accept a release and discharge of liability made by the Association on behalf of the named insured including owners under the policy, except for mortgagees who are named insured under the policy. The Association is hereby appointed as the attorney-in-fact for each owner in order to implement the intent of this paragraph.
6.3 Damage or Destruction. In the event that any portion of the common elements of the condominium is damaged or destroyed, then the Association shall promptly cause the damage or destruction to be repaired, replaced or restored as a common expense which shall be assessed against all of the units unless the unit owners agree otherwise with the consent of all eligible mortgagees.