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ARTICLE 10. INSURANCE; CASUALTY LOSSES; CONDEMNATION
Section 10.1 Insurance Coverage. Commencing not later than the time of the first conveyance of a Unit to a person other than the Declarant, the Association must maintain in its own name, to the extent reasonably available and subject to reasonable deductibles:
- Property insurance on the Common Elements and on property that must become Common Elements, insuring against risks of direct physical loss commonly insured against, as near as practicable to the full insurable replacement value (without deduction for depreciation) of the Common Elements, exclusive of land, excavations, foundations, and other items normally excluded from property policies;
- Commercial general liability insurance, including medical payments insurance, in an amount not less than One Million Dollars ($1,000,000.00) covering all occurrences commonly insured against for bodily injury and property damage arising out of or in connection with the use, ownership, or maintenance of the Common Elements and, in cooperatives, of all Units;
- Fidelity insurance; and
- Such other insurance as the Association deems advisable; provided, that notwithstanding any other provisions herein, the Association shall continuously maintain in effect casualty, flood, and liability insurance and a fidelity bond meeting the insurance and fidelity bond requirements for similar projects established by Federal National Mortgage Association, Governmental National Mortgage Association, Federal Home Loan Mortgage Corporation, Federal Housing Authority, and Veterans Administration, so long as any of them is a Mortgagee or Unit Owner, except to the extent such coverage is not available or has been waived in writing by such agencies.
Section 10.2 Casualty Losses. In the event of substantial damage to or destruction of any of the Common Elements, the Association shall give prompt written notice of such damage or destruction to the Unit Owners and to the holders of all First Mortgages. Insurance proceeds for damage or destruction to any part of the Common Elements shall be paid to the Association as a trustee for the Unit Owners, or its authorized representative, including an insurance trustee, which shall segregate such proceeds from other funds of the Association.
Section 10.3 Condemnation. In the event any part of the Common Elements is made the subject matter of any condemnation or eminent domain proceeding, or is otherwise sought to be acquired by any condemning authority, the Association shall give prompt notice of any such proceeding or proposed acquisition to the Unit Owners and to the holders of all First Mortgages who have requested from the Association notification of any such proceeding or proposed acquisition. All compensation, damages, or other proceeds therefrom, shall be payable to the Association.
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