Do You Know The Insurance Coverage Of Your HOA?

Insurance for the homeowners association provides protection for the association and homeowners to insure common areas as HOA’s are responsible for them.  Part of the homeowners association dues are used to cover the insurance needed for the association which could lead to savings for individual homeowners insurance.  Without the homeowners association website, how would you know where the homeowners association insurance ends and your coverage begins?

 

 

The easiest way to establish what type of insurance the homeowners association has is to read and understand the CC&R’s.  Typically, most HOA’s insurance coverage is for damage and personal injuries but the governing documents specifically outline which areas are covered.  After confirming those areas, then you can get the coverage you need without duplicating what the association has already insured.

 

As a result, some homeowners adjust their insurance policy to not cover what the homeowners association policy does.  Aside from that, the HOA board should ensure the association has proper coverage against accidents and injuries.  If there would be a gap in coverage, then a special assessment might be levied against residents to pay for the legal costs regarding a lawsuit.

 

 

The goal with homeowners insurance is to always have sufficient coverage to avoid any potential gaps that may end up in a special assessment or lawsuit.  Periodically, some changes might occur that affect what the homeowners associations policy covers without you ever being aware of it.

 

When those changes occur, the HOA board needs to update the homeowners association website to inform homeowners.  As well, the CC&R’s should be revised to indicate any changes to eliminate confusion among homeowners.  One of the many benefits of living in an association is that homeowners feel more protected and safe when decisions are made in their best interest!