Examining the Insurance Needs of Homeowners’ Associations

Examining the Insurance Needs of Homeowners’ Associations

A homeowners’ association is usually responsible for taking care of the best interests of a subdivision or neighborhood community. They usually maintain common areas and assets in a community such as signage, fencing, landscaping, clubhouses, and pools among others. HOAs also create and enforce rules in accordance with a set of covenants designed to help maintain property values and upkeep. HOAs are exposed to various risks in taking care of community business. Here’s what you should know about HOA insurance.

Covering Your HOA

HOAs should consider the following types of insurance products:

  • General liability: Covers injuries to third parties while in common areas for which the HOA is responsible
  • Property insurance: Protects facilities and grounds from covered perils such as fire, theft, and natural disasters
  • Professional liability: Covers any claims as a result of errors, omissions, and other negligence of anyone affiliated with an HOA, especially employees
  • Directors and officers: Protects HOA board members from claims related to their decisions or actions.

Doing What’s Best for the Community

According to experts on insurance for homeowners associations, many HOAs don’t carry enough coverage or any at all. Considering the financial consequences of HOA action and inaction, having sufficient coverage is in the best interests of the neighborhood. It’s important to have a comprehensive plan that addresses all the needs of the HOA.

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