Purchasing a home in a community that has a homeowner’s association is becoming an increasingly common scenario throughout the country. HOAs offer the benefit of neighborhood amenities, such as golf courses, tennis courts and swimming pools. Fees collected by an HOA also may be used for ground maintenance which helps maintain the appearance of neighborhood homes and may even increase home values.
Recurring fees paid by condominium or homeowners can also go towards an HOA insurance policy. Homeowner’s association insurance is coverage purchased by an HOA to cover repairs to common areas and to protect the HOA against liability claims.
It works similar to other types of insurance policies by protecting against personal injury and property damage. If someone sues the HOA or community property gets damaged, the insurance company will review the claim and will approve if it is deemed valid.
What Does HOA Insurance Cover?
Many HOAs carry what is known as a “master policy.” An HOA master policy generally provides coverage in the event that damage is caused to property shared by all owners, such as common walls, roofs, stairways, lobbies, basements, elevators, atriums, pools, ponds, lakes, fitness centers, clubhouses or playgrounds.
Damage may be caused by fire, wind, vandals, criminals or other sources; however, not all types of damage are covered. For example, a flood insurance policy may need to be purchased separately.
HOAs also may purchase general liability insurance, sometimes referred to as HOA liability insurance for homeowner’s associations, to cover the costs of lawsuits pertaining to medical expenses filed by people who are injured in common areas of the property. HOA liability insurance may include “directors and officers” coverage.
If a person sustains a loss due to the mishandling of funds by HOA management or from another negligent act, the insurance may cover any damages. HOA insurance does not cover damages or liability for injuries that occur within the home or on private property.
Who Should Acquire HOA Insurance?
Homeowner’s associations are required by law to obtain an HOA master policy that covers common areas shared between residents. There are different types of HOA master policies that provide varying amounts of coverage. Before selecting an HOA insurance policy, speak with an experienced insurance brokerage to determine how much coverage is needed to sufficiently protect the HOA against any risks or liabilities they may face.
Anyone that lives in a house or condo that has a homeowner’s association is likely paying towards an HOA insurance policy through fees they pay. It is the responsibility of the homeowner’s association to acquire HOA insurance or an HOA master policy.
However, individual homeowners should continue to protect their private property with personal homeowner’s insurance or a condo insurance policy. Standard homeowner’s insurance will generally cover the interior and exterior of a property.
Request A Quote From Southern States
Located in Alpharetta, Georgia, Southern States Insurance is a leading insurance brokerage offering the coverage that HOAs need to remain protected against risks and liabilities. For more information about HOA insurance or to inquire about a new or updated policy, contact the professionals at Southern States Insurance by phone at 888.971.6304 or request a quote online today.