Understanding Insurance for Homeowners Associations

Homeowners Associations are often required to carry Insurance for the buildings in the association. The types of coverage and coverage limits vary in each Homeowners Association. We will go some  basic tips to help you get your HOA properly Insured.

Understanding Insurance for Homeowners Associations- CC&Rs
Most Homeowners Association, upon inception file documents called the Covenants, Conditions, and Restrictions, also referred to as CC&Rs. These CC&Rs are the governing rules f the Homeowners Associations and often contain clauses that pertain to the Insurance requirements for the Association. Before making any major changes with the Homeowners ssociation’s Insurance, it is imperative to review the CC&Rs to make sure all of the requirements are being met.

Understanding Insurance for Homeowners Associations- Building Coverage
The majority of Homeowners Associations are required to insure the actual building structures with the tenants being responsible for insuring the inside of the units. This equirement can vary from Association to Association so it is critical that the CC&Rs are properly reviewed. It is also important that the building structure is covered to he proper limits. The replacement cost of each building can vary dramatically depending on the age, construction type, location, etc. It is best not to assume the building is already insured at the proper limits. Every Association should discuss the limits with their broker to determine the proper replacement cost each building.

Understanding Insurance for Homeowners Associations- Other Important Coverages
In addition to the building coverage, there are several additional coverage that are important for Homeowners Associations. Every Homeowners Association should carry some form of General Liability in case of a bodily injury or property damage claim. Directors & Officers Insurance is another important coverage for most Homeowners Associations to consider. In many cases Workers Comp is an important coverage as well, depending on the operations.

If you would like to learn more about the Insurance needs of your Homeowners Association, give us a call! You can reach us at 925-297-4829.

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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.