2019 Louisiana Laws
Revised Statutes
Title 9 - Civil Code-Ancillaries
§1131.23. Insurance

RS 1131.23 - Insurance

A. Commencing not later than the time of the first conveyance of a timeshare interest in timeshare property located in Louisiana to a person other than a developer, the timeshare association shall maintain the following:

(1) Property insurance covering the timeshare property, insuring against all risks of direct physical loss commonly insured against. The total amount of insurance, after application of any deductibles, shall be not less than eighty percent of the actual cash value of the insured property, exclusive of land, excavations, foundations, and other items normally excluded from property insurance policies; and

(2) Comprehensive general liability insurance, including medical payments insurance, in an amount determined by the board of directors of the timeshare association, 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 timeshare property.

B.(1) If the insurance described in Subsection A of this Section 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 owners.

(2) The declaration may require the timeshare association to carry any other insurance, and the timeshare association in any event may carry any other insurance it deems appropriate, to protect the association or the owners.

C. Insurance policies carried pursuant to Subsection A of this Section must provide that:

(1) Each owner is an insured person under the policy with respect to liability arising out of his ownership of a timeshare interest in the timeshare property or his membership in the association.

(2) The insurer waives its right to subrogation under the policy against any owner or members of his household.

(3) No act or omission by any 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 the owner covering the same property covered by the policy, the policy is primary insurance not contributing with the other insurance.

D. Any loss covered by the property policy under Paragraph (A)(1) of this Section shall be adjusted with the timeshare association, but the insurance proceeds for that loss shall be payable to any insurance trustee designated for that purpose, or otherwise to the timeshare association, and not to any mortgagee. The insurance trustee or the timeshare association shall hold any insurance proceeds in trust for owners and privilege holders as their interest may appear. Subject to the provisions of Subsection G of this Section, the proceeds shall be disbursed first for the repair or restoration of the damaged timeshare property, and owners and privilege holders are not entitled to receive payment of any portion of the proceeds unless there is a surplus of proceeds after the timeshare property has been completely repaired or restored, or the timeshare plan is terminated.

E. An insurance policy issued to the timeshare association does not prevent an owner from obtaining insurance for his own benefit.

F. An insurer that has issued an insurance policy to the timeshare association under this Section shall issue certificates or memoranda of insurance, upon request, to any owner or mortgagee. The insurance may not be cancelled until thirty days after notice of the proposed cancellation has been mailed to the timeshare association, each owner and each mortgagee to whom certificates of insurance have been issued.

G.(1) Any portion of the timeshare property damaged or destroyed shall be repaired or replaced promptly by the timeshare association unless any of the following occur:

(a) The timeshare plan is terminated.

(b) Repair or replacement would be illegal under any state or local health or safety statute or ordinance.

(c) Eighty percent, or such other percentage provided in the declaration, of the owners vote not to rebuild.

(d) The cost of repair or replacement of timeshare property subject to an ownership timeshare interest in excess of insurance proceeds and reserves is a common expense.

(2) In the case of an ownership timeshare interest, if the entire timeshare property is not repaired or replaced:

(a) The insurance proceeds attributable to the damaged timeshare property shall be used to restore the damaged area to a condition compatible with the remainder of the timeshare property.

(b) The insurance proceeds attributable to timeshare property which is not rebuilt shall be distributed to the owners of those timeshare interests and the owners of the timeshare interests to which unrepaired limited common elements were assigned.

(c) The remainder of the insurance proceeds shall be distributed to all the owners in proportion to their interest in the timeshare property.

(3) In the case of a lease timeshare interest, if the entire timeshare property is not repaired or replaced:

(a) The insurance proceeds attributable to the damaged timeshare property shall be used to restore the damaged area to a condition compatible with the remainder of the timeshare property.

(b) The insurance proceeds attributable to the timeshare property which is not rebuilt shall be distributed to the owners of those timeshare interests and the owners of the timeshare interests to which those limited common elements were assigned up to the amount of the owner's purchase price reduced by a sum computed by multiplying the purchase price by a fraction, the numerator of which is the number of years the owner has owned the lease timeshare interest and the denominator of which is the original term of the lease timeshare interests.

(c) The remainder of the proceeds shall be distributed to the developer.

(4) If the owners vote not to rebuild any unit, that unit's entire common element interest, vote in the association, and common expense liability are automatically reallocated upon the vote as if the unit had been condemned. The association promptly shall prepare, execute, and record an amendment to the declaration reflecting the reallocations.

H. The managing entity shall make available for reasonable inspection by purchasers or their authorized agents a copy of each policy of insurance.

Added by Acts 1983, No. 552, §1; Acts 1984, No. 943, §1, eff. July 20, 1984; Acts 1985, No. 999, §3; Acts 2003, No. 978, §1.

NOTE: SEE ACTS 1985, NO. 999, §5.