{"data":{"id":"us-ky/krs-381.9187","jurisdiction":"us-ky","citation":"KRS 381.9187","heading":"Insurance.","body":"(1) Commencing not later than the time of the first conveyance of a unit to a person\nother than a declarant, the association shall maintain, to the extent reasonably\navailable:\n(a) Property insurance on the common elements insuring against fire and\nextended co verage perils and such other risks as may be determined by the\nassociation. The total amount of insurance after application of any deductibles\nshall be not less than one hundred percent (100%) of the actual cash value of\nthe insured property at the time the insurance is purchased and at each renewal\ndate, exclusive of land, excavations, and other items normally excluded from\nproperty policies; and\n(b) Liability insurance, including medical payments insurance, in an amount\ndetermined by the executive board b ut not less than any amount specified in\nthe declaration, covering all occurrences commonly insured against for death,\nbodily injury, and property damage arising out of or in connection with the\nuse, ownership, or maintenance of the common elements.\n(2) If the insurance described in subsection (1) of this section is not reasonably\navailable, the association shall immediately cause notice of that fact to be hand -\ndelivered or sent prepaid by United States mail to all unit owners. The declaration\nmay require t he association to carry any other insurance, and the association may\ncarry any other insurance it deems appropriate to protect the association or the unit\nowners.\n(3) Insurance policies carried pursuant to subsection (1) of this section shall provide\nthat:\n(a) Each unit owner is an insured person under the policy with respect to liability\narising out of his or her interest in the common elements or membership in the\nassociation;\n(b) The insurer waives its right to subrogation under the policy against any un it\nowner or member of his or her household;\n(c) No act or omission by any unit owner, unless acting within the scope of his or\nher authority on behalf of the association, will void the policy or be a\ncondition to recovery under the policy; and\n(d) If, at the time of a loss under the policy, there is other insurance in the name of\na unit owner covering the same risk covered by the policy, the association's\npolicy provides primary insurance.\n(4) Any loss covered by the property policy under subsection (1) of this section shall be\nadjusted with the association, but the insurance proceeds for that loss are payable to\nany insurance trustee designated for that purpose, or otherwise to the association,\nand not to any mortgagee. The insurance trustee or the associat ion shall hold any\ninsurance proceeds in trust for unit owners and lienholders as their interests may\nappear. Subject to subsection (6) of this section, the proceeds shall be disbursed first\nfor the repair or restoration of the damaged property, and unit o wners and\nlienholders are not entitled to receive payment of any portion of the proceeds unless\nthere is a surplus of proceeds after the property has been completely repaired or\nrestored, or the condominium is terminated.\n(5) An insurance policy issued to the association shall not prevent a unit owner from\nobtaining insurance for his or her own benefit.\n(6) Disposition of insurance proceeds shall be made as follows:\n(a) Any portion of the condominium for which insurance is required under this\nsection and wh ich is damaged or destroyed shall be repaired or replaced\npromptly by the association unless:\n1. The condominium is terminated;\n2. Repair or replacement would be illegal under any state statute or local\nhealth or safety ordinance; or\n3. Eighty percent (80%) of the unit owners, including every owner of a unit\nor assigned limited common element which will not be rebuilt, vote not\nto rebuild.\nThe cost of repair or replacement in excess of insurance proceeds and reserves\nshall be a common expense;\n(b) If the entire condominium is not repaired or replaced:\n1. The insurance proceeds attributable to the damaged common elements\nshall be used to restore the damaged area to a condition compatible with\nthe remainder of the condominium;\n2. The insura nce proceeds attributable to units and limited common\nelements which are not rebuilt shall be distributed to the owners of those\nunits and the owners of the units to which those limited common\nelements were allocated, or to lienholders, as their interests may appear;\nand\n3. The remainder of the proceeds shall be distributed to all the unit owners\nor lienholders, as their interests may appear, in proportion to the\ncommon element interests of all the units.\nIf the unit owners vote not to rebuild any unit, that unit's allocated interests are\nautomatically reallocated upon the vote as if the unit had been acquired by\neminent domain under KRS 381.9113, and the association shall promptly\nprepare, execute, and record an amendment to the declaration reflecting the\nreallocations; and\n(c) Notwithstanding the provisions of this subsection, KRS 381.9157 governs the\ndistribution of insurance proceeds if the condominium is terminated.\n(7) The provisions of this section may be varied or waived in the case of a\ncondominium all of whose units are restricted to nonresidential use.","path":["KRS Chapter 381"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=40014","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:59:12Z","sha256":"12b4aa31e65bb82089e6402d1df4ba832e72e8ccc0f9c0db246198919af40d9e","source_id":"us-ky","stale":false,"prev":"us-ky/krs-381.9185","next":"us-ky/krs-381.9189"},"notice":"GroundRules: Original legal text. Not legal advice."}