Legitimate insurance claims that are material should be made so that homeowner associations receive funds to compensate for damages sustained. On the other hand, it Is Important to realize that questionable insurance claims can result in an HOA paying higher insurance rates for many years because denied claims can result in an insurance history report that attaches to the property for many years . Not even changing insurance companies will result in the elimination of an adverse insurance history because each new insurance company checks with the last insurance company regarding its history of claims.

The lesson is clear: possible insurance claims should be reviewed carefully by the board of directors before a claim is made. Where a claim is questionable, the possible gain must be weighed against the possible long term cost.