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Plaza East's insurance at risk after 2024; authority extends coverage while pursuing options
Summary
Staff reported that Plaza East would remain covered under the master policy through Dec. 31, 2024, but insurers may not renew due to claim history and market retreat. Management also described a recent mold complaint being triaged and capital repairs underway to improve habitability and insurability.
Plaza East management and housing authority staff told commissioners the site is insured through Dec. 31, 2024, under an extension from the current master insurer but warned that coverage beyond that date is not secured.
Ted Perini, the authority's resources analyst, said brokers could not find a standalone habitability policy for Plaza East after a months-long search, citing the site's claims history and a broader California insurance market contraction. MBS, the property's master-policy carrier, agreed to extend coverage to the end of the 2024 calendar year, giving the authority roughly six months to identify alternatives. Perini said the authority is exploring options with brokers, counsel and internal funding, including potential self-insurance or using recent and planned capital investments to improve the site's insurability.
John Stewart Company regional director Ron Bowen, who presented the Plaza East operator's operational report, described May maintenance activity (158 work orders opened, 157 closed) and discussed a recent mold complaint. Bowen said staff obtained two remediation bids, approved one and are scheduling abatement; he explained the mold in that instance appears to stem from high indoor moisture and limited air circulation rather than an active leak, and he estimated remediation scheduling "early next week." Bowen also said the property is adding education for residents about moisture and mold prevention.
Why it matters: Loss of habitability coverage could force the authority to consider high-cost alternatives, such as a near-term self-insurance fund or materially higher premiums, while residents rely on services that are tied to the property remaining habitable and insured. The authority has allocated capital funding for Plaza East stabilization and said it will use repairs and investments to strengthen its position with insurers.
Next steps: Staff will continue broker outreach, pursue quotes, and return to the commission with options. Plaza East will remain covered through Dec. 31, 2024 under the current arrangement; the authority indicated it will seek a long-term solution for 2025 before that date.
