HOA Issue: Lender Demanding Higher Insurance Coverage

[Mike Welch]

I've been managing the insurance policy renewal for my 4-unit HOA in San Francisco since 2005. Once I did some shopping around and found a broker and insurance carrier offering good rates, I've simply renewed each year with the carrier.

This year, the broker notified us that one of the lenders (WFB), who has a fractional interest in one of the four units, is demanding that we double our liability coverage.

Given that the lender is not paying the premium, and that they only half a partial stake in 1 of the 4 units in the building, what legal rights do they have to compel the HOA to seek out a higher premium and double liability coverage?

I'm baffled by this issue, and wonder if any of the investors at this site have run into this issue when dealing with condos you either own primarily or invest in?

Thank you in advance for your replies!