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Senator Jackie Speier, Chair
California Senate Insurance Committee
State of California
2032 Capitol Building
Sacramento, California 95814
Re: Investigative hearing on homeowner association insurance
Dear Senator Speier:
I am writing to you regarding the hearings on the role of insurance companies in homeowner associations. With George Bush assuming the presidency, it is even more imperative that consumers be protected, especially homeowners. His father has been a major lobbyist for the dominant insurance company in the homeowner association market – Chubb.
As I have indicated before, homeowners finds themselves in their current predicament because insurance lobbyists lobbied the California State Legislature to pass laws requiring homeowner associations to purchase insurance. This insurance enables boards to violate homeowner rights, to thumb their noses at the CCR’s, deny due process to homeowners and refuse to provide equal protection to them. They can do this because the insurance paid for by the very homeowners who are victimized, insulates the boards from any consequences of their violations. The only recourse for a homeowner is file suit against the board – and this is too prohibitively expensive. The homeowner also faces the damoclean sword of attorney fees if he/she does not prevail. The homeowner also faces the conspiracy between boards and association lawyers. The latter seize on this golden opportunity to ratchet up attorney fee by encouraging boards to engage in law suits. Ms. Vance has outlined to you what has happened to me recently.
As the California State Legislature passed laws – often overriding existing contracts between homeowners and the association – that enable the above to be possible, it now has to find a remedy. That is why it is important to hold these hearings now. We understand that other matters have prevented you from doing so in the past 2 years, but we think that the situation does not allow any further delay. The urgency is further accentuated because one insurance company – Chubb Insurance – has secured a monopoly in the market place by promising the very thing which is at the root of homeowners problems, namely, that they will defend boards no matter what boards do.
We will be happy to meet with you at your convenience ahead of time to discuss the above matters. We appreciate your concern and thousands of homeowners across the state look to your continued leadership in this arena. We wish you and your family a wonderful Christmas, and hope that the New Year brings success in your legislative endeavors.
Sincerely,
Elizabeth McMahon - Director
American Homeowners Resource Center
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