Imagine you commute to work down a neighborhood road marred by potholes. You beg your local government to fix them, but your local government ignores you, claiming that it’s not in the budget to fix potholes. So you convince your friendly Neighborhood Association to raise money to fill the potholes with dirt. Problem solved! Your commute is smoother and everyone in your neighborhood is happy to solve the Pothole Problem.
While you’re perfectly satisfied driving on your pothole-free road, the State comes in and determines that it never intended for Neighborhood Associations to fix road problems; after all, that is a TxDOT or county problem, not the Neighborhood Association’s! “But State, I went to my local government first, and they didn’t have the money to help with my Pothole Problem,” you plea, “all I want is to be rid of the Pothole Problem and get on my way to work.” Deaf to your plea, the State decides that Neighborhood Associations are no longer allowed to fund road problems. Now, Neighborhood Associations are out the business of fixing potholes.
Oversimplified as it may be, this is the long-and-short of the problems facing consolidated insurance programs in Texas. Wrap-up insurance policies, often known as owner-controlled insurance programs (OCIPs), are the construction industry’s answer to the Pothole Problem.