Note 14 - Insurance and Construction Defect Claim Reserves

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Liability for Future Policy Benefits and Unpaid Claims Disclosure [Text Block]

14. Insurance and Construction Defect Claim Reserves

The following table summarizes our insurance and defect claim reserves activity for the years ended December 31, 2019, 2018 and 2017. These reserves are included as a component of accounts payable and accrued liabilities and accrued and other liabilities in either the financial services or homebuilding sections of the consolidated balance sheets, respectively.

	December 31,
	2019			2018			2017
	(Dollars in thousands)
Balance at beginning of period	$	55,308		$	52,686		$	50,954
Expense provisions		12,650			11,213			9,697
Cash payments, net of recoveries		(8,493	)		(8,591	)		(9,215	)
Adjustments		950			-			1,250
Balance at end of period	$	60,415		$	55,308		$	52,686

We recorded a $1.0 million and $1.3 million adjustment to increase our insurance and construction defect claim reserves in 2019 and 2017, respectively. The adjustments were related to greater than expected expenditures by our homebuilding subsidiaries. No such adjustments were required for the year ended December 31, 2018.

In the ordinary course of business, we make payments from our insurance and construction defect claim reserves to settle litigation claims arising primarily from our homebuilding activities. These payments are irregular in both their timing and their magnitude. As a result, the cash payments, net of recoveries shown for the years ended December 31, 2019, 2018 and 2017, are not necessarily indicative of what future cash payments will be for subsequent periods.