What Does HOA Insurance Cover?

Homeowners associations (HOAs) are responsible for managing the common areas of a community. A part of that responsibility includes purchasing insurance to protect the association and its members from potential liability claims. But what does HOA insurance cover? In this article, we’ll explore the details of HOA insurance and answer some common questions about coverage.

What is HOA Insurance?

HOA insurance, also known as community association insurance, is a policy purchased by the HOA to cover damage or losses that occur on common property or due to the association’s operations. Typically, HOA insurance policies fall into two categories: general liability insurance and property insurance. General liability insurance covers bodily injury or property damage caused by the association or its members, while property insurance covers damage to common property or buildings.

General Liability Insurance

General liability insurance is designed to protect against third-party claims that arise from actions of the association or its members. This coverage typically includes:

It’s important to note that general liability insurance does not cover intentional acts or criminal behavior by the association or its members.

Property Insurance

Property insurance is designed to protect the association’s common property or buildings from damage due to covered perils. Covered risks may include:

It’s important to note that property insurance does not cover damage to individual units or personal property of members.

What is Not Covered by HOA Insurance?

While HOA insurance provides coverage for many potential risks, there are some exclusions to be aware of. Some of the most common exclusions include:

• Damage to individual units or personal property of members
• Damage caused by earthquakes or other natural disasters not covered by the policy
• Damage caused by criminal or intentional acts by the association or its members
• General wear and tear or maintenance issues

Members of the association should consider purchasing their own insurance policies to cover damages not covered by the HOA insurance policy.

Do All HOAs Have Insurance?

While most HOAs have insurance policies, there is no legal requirement for HOAs to have insurance. However, most mortgages and lenders require that HOAs have insurance policies to protect their investment.

How Much Does HOA Insurance Cost?

The cost of HOA insurance varies depending on the size of the community, the type of coverage purchased, and the location of the association. In general, larger communities with more amenities and higher risk factors will have higher insurance premiums. It’s important for HOAs to work with an experienced insurance agent to ensure they have adequate coverage at a reasonable cost.

Conclusion

HOA insurance is an important way to protect the community and its members from potential liability claims. With both general liability and property insurance available, HOAs have coverage for a wide range of risks. However, it’s important for members to be aware of what is and is not covered by the policy and to consider purchasing their own insurance policies to supplement the HOA policy. By working with an experienced insurance agent, HOAs can ensure they have the coverage they need at a reasonable cost.

FAQ

What is HOA insurance?

HOA insurance is a policy purchased by the HOA to cover damage or losses that occur on common property or due to the association’s operations.

What does HOA insurance cover?

HOA insurance typically includes general liability insurance and property insurance. General liability insurance covers bodily injury or property damage caused by the association or its members, while property insurance covers damage to common property or buildings.

What is not covered by HOA insurance?

HOA insurance does not cover damage to individual units or personal property of members, damage caused by earthquakes or other natural disasters not covered by the policy, damage caused by criminal or intentional acts by the association or its members, or general wear and tear or maintenance issues.

Do all HOAs have insurance?

While most HOAs have insurance policies, there is no legal requirement for HOAs to have insurance. However, most mortgages and lenders require that HOAs have insurance policies to protect their investment.

How much does HOA insurance cost?

The cost of HOA insurance varies depending on the size of the community, the type of coverage purchased, and the location of the association. In general, larger communities with more amenities and higher risk factors will have higher insurance premiums.