How to Assess HOA Insurance Requirements

  • Step 1:Survey all areas to be covered under the homeowners association insurance policy. As a precautionary measure, explain to all homeowners exactly what grounds are covered under the HOA and what is covered under homeowners insurance. The standard HOA policies cover damage caused by wind, fire, rain, flood and lightning.
  • Step 2:Consult an agent who specializes in homeowners association insurance. An agent will guide you in the right direction, explain what is covered and advise what coverage limits would be appropriate for your housing plan. In addition to structure coverage, the HOA insurance policy also covers employee dishonesty, theft errors and omissions.
  • Step 3:Calculate each portion to be covered under HOA insurance and how much it would cost to replace that portion of all the buildings and property maintenance. Establish a reserve for funding when it comes time to replace roofs, gutters and downspouts, pool/spa maintenance and concrete repair. Whether short term or long term, there are always maintenance and repairs that need to be done. Ensure you have adequate funds to cover these. If there is not enough funding available, it could result in lawsuits from the homeowners for negligence or injury. Funds are normally established by homeowners paying the homeowners association fees.
  • Step 4:Obtain several insurance quotes. Amounts of coverage and premiums vary according to how many units are in the housing plan.
  • Step 5:Ask insurance agents what types of insurance other homeowners associations of similar size and shape to yours typically buy and what is recommended for your particular homeowners association.
  • Step 6:Talk with the officers of your homeowners association to get their views of what types of insurance are needed. No one knows your homeowners group better than the officers and those who live there.
  • Step 7:Identify all board of directors as employees for the HOA insurance only. This way they are covered under the theft and dishonesty portions of the HOA.

Tips & Warnings

  • Hire a survey professional to look at your homeowners association insurance needs.
  • Protect against lawsuits from homeowners by clearly stating what is and what is not covered under the HOA, and also state that all homeowners must have homeowners insurance. This way, HOA insurance is left to help with major damage to multiple units in case of disaster.


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