What is the minimum coverage for fidelity insurance based on fund access?

The minimum coverage for fidelity insurance is established to protect against theft or fraud concerning the funds managed by a community association. According to the requirements, the coverage should never be less than three months' assessments. This ensures that the association is adequately protected against potential losses resulting from any dishonest acts by those handling the funds.

Three months' assessments serve as a benchmark because it provides a cushion that reflects the operational needs and expected cash flow of the association. This base level of coverage can help mitigate risks associated with dishonest actions and ensure funds are available to meet ongoing obligations such as utility payments, maintenance, and other operational expenses.

The other options do not reflect the minimum requirement of fidelity insurance in a way that aligns with best practices for community associations. Matching the value of property managed may not accurately represent the risks of fund misappropriation, and coverage for personal funds does not pertain to the operational scope of community association management. Additionally, focusing on operational costs may overlook the need to directly address the risks related to assessments and cash flow from owners. Thus, the guideline stipulating at least three months' assessments becomes critical for safeguarding community resources.