HOAs, also known as homeowner’s associations, have important roles to play in their community. Not only do these groups oversee the homes or condos in their association, ensuring that everyone follows the rules and adheres to the guidelines, but they’re also in charge of running the entire association and any private, yet community accessible parts of the property. As you can imagine, this comes with plenty of possibilities, both good and bad, which is where insurance comes into play.
Clearly, members of the HOA board need to ensure that they have the right policies in place, just in case. Which policies are necessary? Let’s explore your options.
What Falls Under the HOAs Purview?
Essentially, every housing complex or development that has an HOA consists of two parts: those owned by the individual homeowners and those owned by the HOA. Things like the individual houses, yards, immediate driveways, and in some cases, portions of the sidewalk, fall under the homeowner’s responsibility. They have to pay for the homeowner’s building and liability insurance in order to protect their own investments.
When it comes to the HOA, the board is responsible for all of the common spaces. This can include everything from the community pool and recreation room, nearby parking lots, the streets themselves, and possibly the sidewalks, depending on which parts of them aren’t directly owned by the homeowners. In addition, things like trash pickup, snow and ice removal, and more are often the HOAs responsibility as well. Special insurance policies are required to provide some protection to the HOA and board, should something go wrong in any of these common areas.
Property Insurance
Homeowner’s associations need to protect their common property. Anything that the HOA is responsible for, like pools, playgrounds, and other things, needs to have property insurance coverage. Since an HOA is considered a business, regular homeowner’s insurance doesn’t apply. Instead, the HOA will need to take out a specialty insurance policy designed just for HOAs. This way, if a storm knocks a tree into the common building, crushing its roof, the insurance will pay for the repairs, not the HOAs accounts (minus the deductible, of course.)
General Liability Insurance
Next, there’s general liability insurance, as well as its close relative, umbrella insurance. Both of these types of liability policies cover things that the HOA may be found liable for, such as playground-based injuries caused by HOA negligence or issues raised by outside contractors, like a garbage collection truck, paid for the HOA, which takes out a homeowner’s mailbox. In order to avoid having to pay for any related hospital bills, repairs, or missed wages on the part of the parent or homeowner, the liability insurance should provide coverage and pay for these things.
Have Questions? Contact Charlotte Insurance
Want to learn more about property and general liability insurance for HOAs? Contact Charlotte Insurance. Our agents can explore and explain all available options and put together the insurance coverage plan your HOA needs.