Long after the hurricanes have passed, and communities have started to clean up the wreckage and damage done, timeshare owners will be bracing for a fee increase. The 2017 hurricane season has chalked up some serious damage, to some of the most expensive resorts in Florida and the Caribbean, which means that timeshare fees will go up and owners should anticipate these moderate to significant fee increases, for 2018.
Diamond Resorts released a press statement, on September 14, 2017, where they disclosed the impact of Hurricane Irma on several resorts in their vacation portfolio, including the Royal Palm Beach and Flamingo Beach resorts in St. Maarten, the Daytona Beach Regency and The Cove (Ormond Beach) in Florida. Assessments are still being conducted to finalized property damage and report to insurers, and timeshare owners.
Resorts and businesses are preparing for increased property premiums, and another problem, with diminished availability of insurance coverage in 2018. Insurance companies are constantly tightening premiums and subsidies for businesses in hurricane and flood prone areas; a fact that is going to make timeshare ownership more expensive in the future.
How the National Flood Insurance Program (NFIP) Will Impact Timeshare Costs
Hurricane Harvey estimates, may place the storm as the most expensive natural disaster in United States history. So far, loss estimates have exceeded $190 billion dollars. What is important to note is that the state of the National Flood Insurance Program (NFIP) will directly impact the costs timeshare owners face in 2018.
The NFIP is responsible for subsidizing damage that is sustained by residential and businesses in hurricane and flood prone areas. The problem is that in 2017, the National Flood Insurance Program was $24 billion dollars in debt, before hurricane Harvey arrived. Financial experts are already speculating that losses will not be able to be subsidized through the NFIP; in fact, hurricane Irma and Harvey combined, may spell the end of this flood subsidy insurance program.
The NFIP typically covers Business Interruption (BI), but many insurers have increased deductibles and premiums for businesses. What that means is that a resort that may see some compensation for damage, through the NFIP, will undoubtedly face extremely high premiums in the future. Yes, another cost that will be shouldered equally, by resort timeshare owners.
Either way, the timeshare industry is bracing for some substantial fee increases, assessment levies and repairs that will increase the cost of vacation membership, for timeshare owners.
Special Assessment Fees Are a Notorious Cash Grab for Timeshares
Your membership fee may be locked in, but there are plenty of other ways for your timeshare to approach you for more money. This is the part where many consumers are blindsided; even though the right of the resort to levy fees (often without restrictions) is outlined in the contract. Consumers don’t expect their timeshare to pursue fees in addition to regular maintenance and membership costs.
The ’honeymoon’ phase of timeshare ownership disappears quickly, the moment the timeshare begins to aggressively seek more money from the owner. The most common, and least refuted way that a timeshare can make money, is through special assessment fees.
Timeshare owners can be charged an unexpected and often expensive additional fee, for any of the following reasons, outlined in the owner’s contract:
New property improvements (pool, landscaping, fitness or clubhouse renovation, roofing and more).
Change in ownership costs. This happens when timeshares merge with other larger resorts. The legal fees and other expenses can be passed on to the timeshare owners, particularly if it means an improvement in service or amenities.
Natural disasters, floods, tropical storms and hurricanes, and even wildfire damage.
‘At the board’s discretion’ which means a fee increase essentially, ‘just because’.
The most dishonest aspect of timeshare assessment fees, is the fact that the resort frequently does not cap the maximum amount that can be charged. Think about it this way; it allows the timeshare to (at its own discretion), charge each member an exorbitant fee, with little to no reasonable excuse required. And unfortunately, there is nothing that the timeshare owner can do to dispute it. Failure to pay an assessment fee can result in more fees and penalties, and even collection, which can negatively impact personal credit.
Are Vacation Resorts Insured Against Hurricane Damage?
Homeowners know how important it is, to have comprehensive property and liability insurance. You never know when something is going to happen, including a natural disaster, like a windstorm, flood or wild fire. Timeshare resorts naturally, must procure a comprehensive insurance plan for each property as well. But whenever a storm, or flood or fire occur, timeshare owners are often dismayed to see a substantial increase in their fees. While membership fees can remain locked, other types of fees, including assessment and maintenance costs, are passed along equally to every timeshare owner in the resort.
While it is understandable that each timeshare owner is responsible for his or her share of damages, it can be difficult to comprehend the fee increases. After all, doesn’t the insurance policy for the resort cover incidental damage, from hurricanes or other natural disasters?
One of the things that timeshare owners are surprised to learn, is how much liability they share with the resort, and other timeshare owners. Not only can costs for repairs after natural disasters be passed along to members, but other liability costs can too. For instance, did you know that if a child or adult injures themselves in your suite or on the resort, you may be financially responsible for any settlement or legal costs incurred? If someone sues the resort for personal injury, that cost is also shared, among all timeshare owners.
There are some insurance companies that offer bridge or gap insurance, for timeshare owners. While policies vary, most provide protection against personal injury litigation costs. It is difficult however to find a policy that will insulate a timeshare owner against the repair costs of a natural disaster incident. If you are a current owner, consult with an insurance professional.
Take the time to learn more about the scope of your obligation and fee increase thresholds, by speaking directly with your timeshare, before a fee spike occurs. And if you are already finding your timeshare to be a financial burden you no longer want, call us at 1-800-587-EXIT for a free consultation, and learn more about your option to cancel your timeshare, with Aconsumercredit™.