The Essentials of HOA Insurance

When you are in charge of a homeowners association (HOA) or similar body, you have a lot of responsibility for members of your neighborhood community. You have to do a lot of work to maintain common spaces, enforce community bylaws and keep residents satisfied as best you can. Indeed, your job probably involves a lot of public relations.

But with the responsibility of running an HOA come liabilities of various shapes and sizes. As a result, you have to take steps to protect yourself and your organizational structure with appropriate insurance benefits. This process will involve a fair amount of customization and attention to detail, but with the help of one of our insurance experts, you can design the policy portfolio that is best for you.

Let’s take a closer look at the essential coverage you need to include in your policy portfolio. outside of several homes with cars parked on the street

outside of several homes with cars parked on the street

Why HOAs Need Insurance
HOAs are not loose associations. They are usually very tightly governed and regulated, which makes them responsible for a lot of goings-on within their developments, be they neighborhoods, cul-de-sacs, condominiums or apartment complexes. As a result, there are numerous challenges that might require your involvement at any time.

You might have to intervene to settle disputes between different residents.
Hazards—storms, fires, vandalism, theft—could damage or destroy shared association property.
Disputes between the HOA and residents could lead to lawsuits and other challenges.

Under these and many other circumstances, the association will have to respond, both for its security and the stability of the community. However, the response will cost money, which could put the association in a significant financial bind.

Therefore, by having appropriate insurance benefits, the association will be able to respond to these challenges appropriately. Most HOAs need at least the following:

Shared property insurance: Property insurance helps the HOA insure shared portions of the property that belong to it. For example, though you might own your condominium, the HOA will probably carry a master insurance that will cover portions of the building that are not your direct possessions (like the roof and outer walls).
Liability insurance: In the event that someone sustains an injury in one of your community spaces, then the HOA could be sued over their injury costs. Liability insurance will help the association respond back to the lawsuit and reach appropriate settlements with the affected parties.

Many associations fund their HOA policies through their HOA fees, which are paid regularly by the homeowners. However, these policies are not the same as the average homeowners, condo or renters insurance policies. They will not cover the homeowners’ personal property, individual homes or liabilities included on their properties. However, they can work in conjunction without the average home or condo policy to provide a comprehensive blanket of protection throughout the association.

Posted 2:04 PM

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