A few owners have been asking about the status of our insurance coverage. 

Here is the background:  During a Board meeting on August 27, 2009, Sue Savio of Insurance Associates, the Ilikai AOAO insurance provider, presented details of the insurance renewal.  The Ilikai’s previous insurance terms were to expire on Monday, August 31.  So on Thursday, August 27, the Board was reviewing the insurance renewal terms.  Apparently, they had done nothing prior to that.  They literally waited till Thursday, August 27, with the insurance terms to expire on Monday, August 31.  It was obvious that whatever Sue Savio presented to them was news to them.  So the Board found itself in the situation when they either had to accept those new terms or have the AOAO without insurance.  So they voted to accept the new terms.  Some Board Directors stated that they were going to look into renegotiating the terms.  To our knowledge, we are still stuck with the same increase.

Take a look at the Ilikai insurance for 2008-2009 and compare that with the Ilikai insurance for 2009-2010.  This shows an increase of $137,801 in our insurance premiums compared to last year.  Granted, we had a couple of incidents related to flood due to fire sprinklers.  But not to solicit bids prior to the upcoming insurance renewal deadline?!

Also take a look at the coverage itself.  We now have a deductible of $50K, compared to $10K last year, for “all perils excluding hurricane.”  Even Sue Savio herself was raising concerns about such a high deductible, which she said was way higher than the norm of the industry and should be a concern.  In practical terms, should we have an incident like the ones we had last year, we’ll have to pay $50K before the insurance kicks in.  Also note the $5M coverage for Directors’ liability, which also includes the Management Company (Hawaii First).  Why do they need $5M in liability coverage?

The next Ilikai AOAO Board of Directors meeting is scheduled for Thursday, October 29, 2009 at 3 PM, 2^nd floor.  Board meetings are open to Ilikai owners.  Ilikai owners are invited and encouraged to attend.  The Board is now in the midst of finalizing the budget for the next year.  They are also making plans to expend millions of dollars our AOAO funds on various projects over the next couple years.  There are also lots of unresolved issues and problems.  This includes timeshare operations at the Ilikai, even though the Ilikai Declaration and Bylaws only permit apartment and hotel use of units.  The Board and the AOAO legal counsel, Mr. Milton Motooka, continue to close their eyes on this and refuse to cite Shell for this violation.