Legal Question in Insurance Law in California

Re: Insurance Co. Settlement Offer

Insurance payments can generally be used for any purpose the recipient chooses. There are exceptions to this rule, though, and I don't know whether any of them might apply to your association. It is also possible that the terms of your settlement agreement specify how the money is to be used; if so, the association is bound by that agreement. Your insurance policy may also control how the money may be spent.

But the law governing use of settlement proceeds is not the only thing you need to worry about. There is a separate body of law dealing with the duties of homeowners' associations, and it may impose duties as to how this money may be used and/or how decisions about its use are to be made. Your association must obey any such requirements.

Hopefully the association has a lawyer it can consult with on issues like this. If it doesn't, it should get one. If that is not an option, you should at least re-post this question under Real Estate Law and/or Real Property Law so that attorneys with the relevant expertise can respond.