Hurricane Matthew caused financial pain for owners of one Disney Vacation Club property.
Projected 2017 dues for Disney's Hilton Head Island Resort are now available online, several days after the release of numbers for most other properties. The source of the budget delay can be traced back to Hurricane Matthew. The Disney timeshare resort was closed for 21 days--from October 5 through 26--due to the storm threat and subsequent damage clean-up.
Buried within the resort's budget is some indication of the fallout from the October storm.
Disney Vacation Development is loaning a total of $750,000 to the Hilton Head Island Condominium Assocation to help cover insurance deductibles from storm damage. The loan is for a period of 4 years. Over that span, interest will accrue at a modest rate of 1.33% per year componunded monthly. The total charge billed to 2017 dues for repayment of this loan is $.1133 per point or $155,126 total.
The full text of the budget note is as follows:
DVD has made a loan to the Association to fund repairs related to Hurricane Matthew in the amount of $750,000, which is the estimated amount not covered under its insurance policy due to the deductible. This loan will accrue interest at 1.33% per year compounded monthly and will be repaid by the Association in monthly installments over the next ve years beginning January 1, 2017. The Association will make approximately $155,126 in payments on this loan in 2017.
Timeshares reserve the right to issue special assessments to owners to cover unexpected charges of this nature. Disney Vacation Development's willingness to back a low-interest loan, allowing owners to pay off the obligation over the course of several years, is somewhat unique. It would have been within Disney's rights to charge the full $750,000 to owners in 2017, a move which would have cost owners around $.75 per point during the coming year.
Insurance rates for Hilton Head will only see a very small increase in 2017, from $.1033 per point to $.1063. However, the late timing of Hurricane Matthew--coming just 5 weeks before publication of the new budgets--may delay a greater increase until the 2018 calendar year.
Overall annual dues for Disney's Hilton Head Island Resort will rise by 6.7%, from $6.8153 per point in 2016 to $7.2728 per point in 2017. Numbers for Hilton Head Island have been added to our previous story covering other Disney Vacation Club properties. Dues for Aulani, Disney Vacation Club Villas have not yet been published.
Essentially there IS a special assessment. $750,000 to shared by all owners. However, Disney is loaning that money to owners, and will recoup it over the next 4 years.
The portion of the loan being paid this year amounts to $.1133 per point. An owner of 200 points will pay $22.66 for storm damage in 2017. And the amount will likely be larger in 2018-2020 since the 2017 bill is for less than 1/4 of the total.
Not a huge amount, but still an extra expense which wouldn't have been billed if not for the storm.
It's also possible that insurance premiums will see an extra increase in 2018. The hurricane hit so late that it may have been too late for the insurer to factor it into 2017 rates.
This hike won't be unique to HHI Owners. Insurance providers know they can't hit an area with storm damage with 20% - 50% rate hikes to cover their out of pocket expenses so they up the premiums 5% or so across the board to ALL their customers. I've never submitted any claims to my Home Owners Ins Co but I've had BIG jumps due to Katrina and others. Ins Co flat out told me so.