07 Jan Homeowners Association Insurance
Homeowners Association Insurance
Homeowners Associations, like most entities, have certain requirements with respect to Insurance. There are several coverages, options, and pricing plans available for Homeowners Associations. We will explain some of the most important items to consider when shopping for Homeowners Association Insurance.
Homeowners Association Insurance – CC&R’s
The Homeowners Association’s Covenants, Conditions & Restrictions, or CC&R’s, are the Homeowners Association’s governing documents. These documents will often specify the Insurance Requirements of both the Homeowners Association and its members. Before shopping for Insurance, it is absolutely imperative that the CC&R’s are reviewed to assure the Homeowners Association is properly Insuring the property.
Homeowners Association Insurance – Property Insurance
In most cases, the Homeowners Association will be responsible for insuring the building structures with the residents being responsible for the studs
out. This can very from HOA to HOA depending on the CC&R’s. When shopping for Property Insurance, it is critical that the HOA’s board members work with their broker to obtain an accurate and reasonable replacement cost to Insure. Sufficient coverage is far more important than saving a few bucks for your members. If there is a large or total loss, having inadequate insurance can cost the HOA hundreds of thousands of dollars, or more.
Homeowners Association Insurance – Other Important Coverages
There are additional coverages Homeowners Associations should consider, depending on their operations. If the Homeowners Association hires employees or independent contractors to perform maintenance or other duties, there should be a Workers Comp policy in place. In addition, many Homeowners Associations purchase a Directors & Officers Liability Insurance policy, also referred to as D&O. Depending on the HOA’s operations, D&O may be a very important and usefull coverage. D&O Insurance acts as indemnification against legal action for alleged wrongful acts by the Directors or Officers of the Association. There are other important applications to this coverage as well.
If you would like to learn more about any of these coverages, give us a call at 925-297-4829.
All information is general in nature and is intended to provide guidance only. It is up to you to request specific coverage options, the agency and agent do not bear this responsibility. Always read the policy if there is a questions about coverage or a claim. If any information herein should conflict with your actual policy’s specific language, the policy language will be controlling.