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Insurance - 68 Pa. Cons. Stat. § 3312

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     § 3312.  Insurance.
        (a)  Insurance to be carried by association.--Commencing not
     later than the time of the first conveyance of a unit to a
     person other than a declarant, the association shall maintain,
     to the extent reasonably available:
            (1)  Property insurance on the common elements and units
        exclusive of improvements and betterments installed in units
        insuring against all risks of direct physical loss commonly
        insured against or, in the case of a conversion building,
        against fire and extended coverage perils. The total amount
        of insurance after application of any deductibles shall be
        not less than 80% of the actual cash value of the insured
        property exclusive of land, excavations, foundations and
        other items normally excluded from property policies.
            (2)  Comprehensive general liability insurance, including
        medical payments insurance, in an amount determined by the
        executive board but not less than any amount specified in the
        declaration covering all occurrences commonly insured against
        for death, bodily injury and property damage arising out of
        or in connection with the use, ownership or maintenance of
        the common elements.
            (3)  Any property or comprehensive general liability
        insurance carried by the association may contain a deductible
        provision.
        (b)  Other insurance carried by association.--If the
     insurance described in subsection (a) is not maintained, the
     association promptly shall cause notice of that fact to be hand
     delivered or sent prepaid by United States mail to all unit
     owners. The declaration may require the association to carry any
     other insurance and the association in any event may carry any
     other insurance in such reasonable amounts and with such
     reasonable deductibles as the executive board may deem
     appropriate to protect the association or the unit owners.
        (c)  Contents of insurance policies.--Insurance policies
     carried pursuant to subsection (a) must provide that:
            (1)  Each unit owner is an insured person under the
        policy with respect to liability arising out of his ownership
        of an undivided interest in the common elements or membership
        in the association.
            (2)  The insurer waives its right to subrogation under
        the policy against any unit owner of the condominium or
        members of his household.
            (3)  No act or omission by any unit owner, unless acting
        within the scope of his authority on behalf of the
        association, will void the policy or be a condition to
        recovery under the policy.
            (4)  If, at the time of a loss under the policy, there is
        other insurance in the name of a unit owner covering the same
        property covered by the policy, the policy is primary
        insurance not contributing with the other insurance.
        (d)  Proceeds from property insurance.--Any loss covered by
     the property policy under subsection (a)(1) shall be adjusted
     with the association but the insurance proceeds for that loss
     shall be payable to any insurance trustee designated for that
     purpose or otherwise to the association and not to any mortgagee
     or beneficiary under a deed of trust. The insurance trustee or
     the association shall hold any insurance proceeds in trust for
     unit owners and lienholders as their interests may appear.
     Subject to the provisions of subsection (g), the proceeds shall
     be disbursed first for the repair or restoration of the damaged
     common elements and units and unit owners and lienholders are
     not entitled to receive payment of any portion of the proceeds
     unless there is a surplus of proceeds after the common elements
     and units have been completely repaired or restored or the
     condominium is terminated.
        (e)  Unit owner may obtain insurance.--A unit owner may
     insure his unit for all losses to his unit, including all losses
     not covered by the insurance maintained by the association due
     to a deductible provision or otherwise. An insurance policy
     issued to the association shall not prevent a unit owner from
     obtaining insurance for his own benefit.
        (f)  Evidence and cancellation of insurance.--An insurer that
     has issued an insurance policy under this section shall issue
     certificates or memoranda of insurance to the association and,
     upon request, to any unit owner, mortgagee or beneficiary under
     a deed of trust. The insurance may not be cancelled until 30
     days after notice of the proposed cancellation has been mailed
     to the association, each unit owner and each mortgagee or
     beneficiary under a deed of trust to whom certificates of
     insurance have been issued.
        (g)  Disposition of insurance proceeds.--
            (1)  Any portion of the condominium damaged or destroyed
        shall be repaired or replaced promptly by the association
        unless:
                (i)  the condominium is terminated;
                (ii)  repair or replacement would be illegal under
            any state or local health or safety statute or ordinance;
            or
                (iii)  eighty percent of the unit owners, including
            every owner of a unit or assigned limited common element
            which will not be rebuilt, vote not to rebuild.
        Except for the costs of repair or replacement which are not
        covered due to deductibles, the cost of repair or replacement
        in excess of insurance proceeds and reserves which have not
        been identified by the executive board to fund costs of
        capital expenditures for the current fiscal year of the
        association is a common expense.
            (2)  If the entire condominium is not repaired or
        replaced:
                (i)  the insurance proceeds attributable to the
            damaged common elements shall be used to restore the
            damaged area to a condition compatible with the remainder
            of the condominium;
                (ii)  the insurance proceeds attributable to units
            and limited common elements which are not rebuilt shall
            be distributed to the owners of those units and the
            owners of the units to which those limited common
            elements were assigned; and
                (iii)  the remainder of the proceeds shall be
            distributed to all the unit owners in proportion to their
            common element interests.
        If the unit owners vote not to rebuild any unit, that unit's
        entire common element interest, votes in the association and
        common expense liability are automatically reallocated upon
        the vote as if the unit had been condemned under section
        3107(a) (relating to eminent domain) and the association
        promptly shall prepare, execute and record an amendment to
        the declaration reflecting the reallocations.
            (3)  Notwithstanding the provisions of this subsection,
        section 3220 (relating to termination of condominium) governs
        the distribution of insurance proceeds if the condominium is
        terminated.
        (h)  Nonresidential condominiums.--The provisions of this
     section may be varied or waived in the case of a condominium all
     of whose units are restricted to nonresidential use.
        (i)  Recovery of deductibles.--If any insurance policy
     maintained by the association contains a deductible, then that
     portion of any loss or claim which is not covered by insurance
     due to the application of a deductible, as well as any claim or
     loss for which the association is self-insured, shall be levied
     by the executive board in accordance with section 3314(c)
     (relating to assessments for common expenses).
     (Dec. 18, 1992, P.L.1279, No.168, eff. 45 days; Nov. 30, 2004,
     P.L.1509, No.191, eff. 60 days)

        2004 Amendment.  Act 191 amended subsecs. (a), (b), (e) and
     (g) and added subsec. (i).
        Cross References.  Section 3312 is referred to in sections
     3221, 3307 of this title.

Last modified: November 27, 2007