Revises provisions governing housing. (BDR 10-1045)

A.B. 324

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ASSEMBLY BILL NO. 324–ASSEMBLYMEMBER ORENTLICHER

MARCH 3, 2025
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Referred to Committee on Judiciary

SUMMARY—Revises provisions governing housing.
(BDR 10-1045)

FISCAL NOTE: Effect on Local Government: No.
Effect on the State: No.

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EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.

AN ACT relating to housing; revising provisions related to property
insurance that common-interest communities are required
to maintain; and providing other matters properly relating
thereto.
Legislative Counsel’s Digest:
Existing law requires a unit -owners’ association of a common -interest 1
community to maintain certain t ypes of insurance, including property insurance. 2
(NRS 116.3113) Under existing law, property insurance policies are required to 3
include the units, which means the physical portion of the common -interest 4
community that is designated for separate ownership o r occupancy, when a 5
building contains units that are divided by horizontal or vertical boundaries. (NRS 6
116.093, 116.3113) This bill eliminates the requirement to include the units divided 7
by vertical boundaries in such insurance policies and authorizes an association to 8
choose whether to include the units in such insurance policies. 9

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN
SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

Section 1. NRS 116.3113 is hereby amended to read as 1
follows: 2
116.3113 1. Commencing not later than the time of the first 3
conveyance of a unit to a person other than a declarant, the 4
association shall maintain, to the extent reasonably available and 5
subject to reasonable deductibles, all of the following: 6
(a) Property insurance on the common elements and, in a 7
planned community, also on property that must become common 8
elements, insuring against risks of direct physical loss commonly 9

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insured against , which insurance, after application of any 1
deductibles, must be not less than 80 percent of the actual cash value 2
of the insured property at the time the insurance is purchased and at 3
each renewal date, exclusive of land, excavations, foundations and 4
other items normally excluded from property policies. 5
(b) Commercial general l iability insurance, including insurance 6
for medical payments, in an amount determined by the executive 7
board b ut not less than any amount specified in the declaration, 8
covering all occurrences commonly insured against for bodily injury 9
and property damage arising out of or in connection with the use, 10
ownership, or maintenance of the common elements and, in 11
cooperatives, also of all units. 12
(c) Crime insurance which includes coverage for dishonest acts 13
by members of the executive board and the officers, employees, 14
agents, directors and volunteers of the association and which 15
extends coverage to any business entity t hat acts as the community 16
manager of the association and the employees of that entity. Such 17
insurance may not contain a conviction requirement, and the 18
minimum amount of the policy must be not less than an amount 19
equal to 3 months of aggregate assessments on all units plus reserve 20
funds or $5,000,000, whichever is less. 21
(d) Directors and officers insurance that is a nonprofit 22
organization errors and omissions policy in a minimum aggregate 23
amount of not less than $1,000,000 naming the association as the 24
owner and the named insured. The coverage must extend to the 25
members of the executive board and the officers, employees, agents, 26
directors and volunteers of the association and to the community 27
manager of the association and any employees thereof while acting 28
as agents as insured persons under the policy terms. Coverage must 29
be subject to the terms listed in the declaration. 30
2. In the case of a building that contains units divided by 31
[horizontal] : 32
(a) Horizontal boundaries described in the declaration, [or 33
vertical boundaries that comprise common walls between units, ] the 34
insurance maintained under paragraph (a) of subsection 1, to the 35
extent reasonably available, must include the units, but need not 36
include improvements and betterments installed by units’ owners. 37
(b) Vertical boundaries that comprise common walls between 38
units, the insurance maintained under paragraph (a) of subsection 39
1 may, but need not, include the units. 40
3. If the insurance described in subsections 1 and 2 is not 41
reasonably available, the association promptly shall cause notice of 42
that fact to be given to all units’ owners. The declaration may 43
require the association to carry any other insurance, and the 44

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association may carry any other insurance it considers appropriate to 1
protect the association or the units’ owners. 2
4. An insurance policy issued to the association does not 3
prevent a unit’s owner from obtaining insurance for the unit’s 4
owner’s own benefit. 5

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