Your Home Owner’s Association needs insurance, as it protects you from having to pay out of pocket for any claims that may result from damage or injuries sustained on the common property of a condominium.
If you’re not sure exactly what cover you will need, you can turn to experts in hoa insurance that can help you get the coverage you need, and the rates you can afford.
What Do The Policies Cover?
The main cover in the HOA Master Policy will typically be for liability and property damage.
The association needs liability insurance, in case someone gets injured on the common property and decides to file a lawsuit. Make sure there are no issues on the property such as broken equipment in the play area, that could become a safety hazard. The HOA could be held responsible for actions such as not fixing broken equipment.
Insurance for property damage could be comprehensive, or it could provide only minimum coverage. This cover is for damage to the HOA common property or buildings. You can claim for the type of damage covered by your policy. Make sure you know exactly what cover you have and if it’s sufficient for your HOA’s needs. It’s possible that you’ll have to upgrade your policy.
The protection provided by master policies can differ, but they usually provide the following cover:
- Property cover, which includes the building structure, the common property, as well as the personal property of the association, such as the clubhouse furniture, exercise equipment, or pool furniture. The property is covered for damage caused by wind, fire, and accidental water damage. If the HOA doesn’t have this insurance, it will have to pay for repairs out of its own pocket, or by increasing dues.
- Catastrophe Insurance protects the HOA against natural disasters.
- Worker’s Compensation cover is useful, in case onsite workers are injured and your HOA is held liable. It covers board members and other volunteers that work for the association without getting payment.
- Discrimination cover protects your HOA if any legal claims are made about discrimination.
- Fidelity cover protects the association against the theft of goods and money. This type of insurance protects the association from theft by employees, association members, or event management companies.
- Directors’ and Officers’ Liability Insurance provides protection to officers and trustees of the HOA for legal expenses, in case they are held liable for making errors during the course of performing their duties.
Keep in Mind:
- It’s essential that your HOA regularly reviews its policies to determine if the cover is still adequate. You don’t want to be in a situation where something happens that is not covered by your insurance.
- Homeowners who share the common areas will pay the cost of the insurance. As a member of the HOA, you will still have to contribute to this.
Your HOA needs sufficient insurance and should update its policies regularly. You don’t want to be subjected to expensive litigation, which could end up costing the association a lot of money. Remember that if you don’t have insurance in place, the HOA will end up having to pay expensive fees out of its own pocket, which will make life harder for the homeowners, as they will all have to contribute to the costs.
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