1.  The developer or the association, if it has been formed, shall maintain:

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(a) Property insurance on the project and any personal property available for use by the owners in conjunction therewith, other than personal property separately owned by an owner, insuring against all risks of direct physical loss commonly insured against, with a provision agreed to by the lender, that the proceeds must be disbursed for the repair or restoration of the property, and that the owners and lienholders are not entitled to receive payment of any portion of the proceeds unless there is a surplus of proceeds after the property has been completely repaired or restored;

(b) Liability insurance, including insurance for medical payments, in an amount not less than $1,000,000 per occurrence, covering all occurrences commonly insured against for death, bodily injury and property damage arising out of or in connection with the use, ownership or maintenance of the time-share property and units; and

(c) Insurance covering the costs of temporary quarters for the owners and other losses commonly insured against.

2.  Each insurance policy carried pursuant to subsection 1 must provide that:

(a) Each owner is an insured person under the policy whether designated as an insured by name individually or as part of a named group or otherwise, as the owner’s interest may appear;

(b) The insurer waives its right to subrogation under the policy against any owner or members of his or her household; and

(c) No act or omission by any owner, unless acting within the scope of his or her authority on behalf of an association, will void the policy or be a condition to recovery by any other person under the policy.