There is nothing simple about insurance, and community association insurance is no exception. Your community should be properly insured to guarantee safety and asset protection for residents. These are just a few of the most frequent questions homeowners can (or should) ask about how HOA insurance works.
What does the Association’s insurance cover?
Community Association insurance coverage differs from one community to the next. The minimum requirements for the Association’s insurance are outlined in the community’s Declaration of Covenants, Conditions and Restrictions (CC&R’s) and / or bylaws.
Generally speaking, though, the Association’s insurance typically provides liability and fidelity coverage for the Association and the Directors and Officers (or Board of Directors).
In a single family subdivision HOA the insurance generally covers association-owned property and operations, such as parks, swimming pools, clubhouses, tennis courts, open landscaped areas, storm drainage facilities, entry monuments, etc.
In an attached condominium or townhome community, coverage generally includes the same things as a single family subdivision as well as parking areas and the buildings themselves, including fixtures and finishes as originally installed by the developer.
For specific information on your Association, you should contact your community’s Association Manager.
Do I still need homeowners insurance if my Community Association already has insurance?
The short answer is yes, you still need homeowners insurance even if your Homeowners Association (HOA) has insurance. While both policies provide coverage, they serve different purposes and protect different aspects of your property.
HOA insurance typically covers common areas and shared amenities within the community, such as the clubhouse, swimming pool, and sidewalks. It also covers the exterior of the buildings and property, including the roof, walls, and landscaping.
On the other hand, homeowners insurance covers the interior of your unit, personal property, and liability for injuries or property damage that may occur within your home. It also provides coverage for additional living expenses in case your home becomes uninhabitable due to a covered loss.
What does my homeowners insurance need to include?
Your situation will be unique and you should discuss your personal homeowners’ insurance coverage with your agent. You may have specific requirements imposed by your mortgage lender and you should review the insurance section of your community’s Declaration of Covenants, Conditions and Restrictions (CC&R’s) and your Association’s bylaws.
If you are in an attached condominium or townhome community, you should discuss including a HO-6 endorsement on your policy with your insurance agent. For special requirements for your Association, contact your Community Association Manager.