There are separate association and individual homeowner policies. The HOA covers the structure, so that if a home or group of homes burns or otherwise have a failure, the development is not scarred with derelict buildings.
The insurer must have felt a million bucks was a “minimax” decision, basically limiting the maximum payout. Legal costs could have exceeded a million in a circus trial. I think they made the right decision.
“I think they made the right decision.”
They retreated instead of standing their ground.