What should an association consider when handling a windstorm self-insurance fund?

When managing a windstorm self-insurance fund, an association needs to prioritize having sufficient coverage for a probable loss. This principle is critical because the purpose of a self-insurance fund is to ensure that the association can adequately meet its financial obligations in the event of a loss, such as damage caused by a windstorm.

By evaluating the likely risks and potential costs associated with windstorm damage, the association can determine the appropriate amount of reserves to maintain in the fund. If the coverage is insufficient, the association may not be able to cover repair or reconstruction costs, leaving members facing financial difficulty and potential assessments. This consideration of probable loss helps ensure that the community is protected against significant financial hardships that could arise from natural disasters.

While aspects such as the proximity of communities, the types of structures involved, and the age of the communities may influence the risk assessment and overall strategy, ensuring that there is sufficient coverage specifically addresses the fundamental goal of a self-insurance fund.