For the benefit of the Association and the unit owners, the board of directors shall obtain and maintain at all times, and shall pay for out of the common expense funds, the following insurance:
(a) A policy or policies of insurance covering loss or damage from fire, with extended coverage endorsement, and such other coverages such as flooding which the Association may deem desirable, for not less than the full insurable replacement value of the building and common elements to a reasonable standard. Such policy or policies shall name developer, the Association and the unit owners as insureds, as their interest may appear, and shall provide for a separate loss payable endorsement in favor of the mortgagee or mortgagees of each unit, if any. Unit owners shall be responsible for obtaining condominium insurance covering their own units at their own expense. Unit owners shall be required to provide proof of such insurance on an annual basis.
(b) A policy or policies insuring the Association. the board of directors, the unit owners and the managing agent, against liability to the public or to the owners of units and of common elements, and their invitees or tenants, incident to the ownership or use of the property. There may be excluded from such policy or policies coverage of a unit owner (other than as a member of the Association or board of directors) for liability rising out of acts or omission of such unit owner and liability incident to the ownership and/or use of the part of the property as to which such unit owner has the exclusive use or occupancy. Limits of liability under such insurance shall not be less than One Million Dollars ($1,000,000) on a combined single limit basis. Such policy or policies shall be issued on a comprehensive liability basis and shall provide cross liability endorsement wherein the rights of named insured under the policy or policies shall not be prejudiced as respects his, her or their action against another named insured; and
(c) worker’s compensation insurance to the extent necessary to comply with any applicable laws.
Unit owners shall be responsible for obtaining, at their own expense, insurance covering their property not insured under paragraph (a) above and against their liability not covered under paragraph (b) above, unless the Association agrees otherwise.
Insurance obtained by the Association shall be governed by the following provisions:
(a) Whenever possible, all policies shall be written with the State of Oregon or a company licensed to do business in the State of Oregon and holding a commissioner’s rating of "A," and a size rating of "AAA," or better by the Best's Insurance Reports current at the time the insurance is written or, prior to the initial meeting of the Association, one acceptable to developer.
(b) All losses under policies hereafter in force regarding the property shall be settled exclusively with the board of directors or its authorized representative. Proceeds of the policies shall be paid to the Association as trustee for the unit owners, or, upon demand of any mortgagee, to an insurance trustee acceptable to the Association and mortgagees of units.
(c) Unit owners shall be required to obtain written approval from the board of directors of all improvements made by the owners to their unit, which affects the building’s insurance specifically that may impair the structural integrity or mechanical systems of the condominium or lessen the support of any portion of the condominium.
(d) Unit owners who obtain individual insurance policies covering any portion of the property other than their personal property and fixtures shall file a copy of such individual policy or policies with the Association within thirty (30) days after the purchase of such insurance.
The board of directors shall make every effort to secure insurance policies that will provide for the following:
(a) A waiver of subrogation by the insurer as to any claims against the board of directors, the manager, the unit owners and their respective servants, agents and guests.
(b) A provision that the master policy on the condominium cannot be cancelled invalidated or suspended on account of the conduct of any one or more individual owners.
(c) A provision that the master policy on the condominium cannot be cancelled, invalidated or suspended on account of the conduct of any officer or employee of the board of directors or the manager without prior demand in writing that the board of directors or manager cure the defect.
(d) A provision that any "no other insurance” clause in the master policy exclude individual owners' policies from consideration and a waiver of the usual proration clause with respect to such policies.
(e) A provision that the insurer issue subpolicies specifying the portion of the master policy earmarked for each owner's interest and that until the insurer furnished written notice and a grace period to the mortgagee insured under the loss payable clause thereof, the mortagagee's coverage is neither jeopardized by the conduct of the unit mortgage-owner, the Association, or other unit owners nor cancelled for nonpayment of premiums.
(f) A rider on the master policy patterned after "Use and Occupancy” insurance which will provide relief from monthly assessments while a unit is uninhabitable by the payment of the condominium expenses thereof and any other fixed costs, including, but without being limited to, taxes, rent, insurance. and mortgage payments. The proceeds from any casualty policy, whether held by the Association or a unit owner, payable with respect to any loss or damage to the common elements, shall be held in trust for the benefit of all insureds as their interest may appear.
(g) A waiver of the insurer's right to determine whether the damage should be repaired. If reasonably available, the policy or policies should contain a stipulated amount clause, or determinable cash adjustment clause, or similar clause to permit a cash settlement covering specified value in the event of destruction and a decision not to rebuild.