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What Insurance Coverage Does Your HOA or Community Association Need?
Did you know that homeowners insurance and insurance for homeowners associations are two different things? While obtaining insurance for your community association can be a complicated process; it doesn’t have to be. Read on to learn more about some of the coverage options you should include in your HOA insurance policy.
HOA and Community Association Insurance
A community association or HOA is a planned community group with a set of rules for all the properties located within the community. As an HOA, you may require residents to get homeowners insurance to protect their individual home and property from losses, damage, and liability. However, you should also carry community association insurance to cover the homeowner’s association itself. A homeowner’s association needs insurance coverage just like an individual does, and community association insurance makes sure that your HOA has the coverage that it needs.
Insurance Coverage For Your HOA Needs
Knowing exactly what type of coverage your business or HOA needs can be challenging, but you don’t need to worry because we are here to help you figure it out. Here is a list of essential elements of a homeowner’s association insurance policy.
- Property Insurance or General Liability – This type of insurance covers the structures or buildings within the HOA. For example, general liability insurance covers the building that condos are located in and the condos themselves, but not the contents inside the condo. All personal items within the condo are the responsibility of the owner who must have their own individual policy to cover them.
- Standard Liability Insurance – The liability property insurance discussed above only covers the structures, but an HOA also needs standard liability insurance to cover visitors who sustain injuries on any property owned by the HOA.
- D & O Coverage – Directors and officers (D&O) liability insurance coverage is another essential coverage for a homeowner’s association. This coverage protects the people who work for the homeowner’s association from any liability when problems arise.
- Workers Compensation Insurance – Like any business with employees, a homeowner’s association must have workers compensation insurance. This insurance covers the HOA when an employee gets injured while working for the association. Even if an HOA just has contractors working at their facilities, they may still need workers compensation insurance depending on the situation.
- Garagekeeper’s Insurance – This type of insurance is for those HOA’s that have parking options for non-members. Parking availability for non-members opens the HOA up to liability from vehicle damage or theft by guests parked in the HOA’s garage, and garagekeeper’s insurance provides protection
- Social Host Liability Insurance – This kind of coverage is great for homeowner’s associations that have a clubhouse or social gathering place. Whenever there is a place where members gather for events, there needs to be insurance coverage. This is particularly important for events serving alcohol on the grounds. When these events occur, it is imperative for an HOA to carry liability coverage, and social host liability qualifies.
These are the basic insurance coverage options you need for a homeowners association; however, there are more available. Reach out to one of our experts at Moran Financial Solutions today to talk about your homeowner's association insurance coverage needs.
How to Find the Most Affordable HOA Insurance
Whether you are starting a new development or looking to upgrade your current insurance coverage, affordability will be a major concern.
There are two ways that you can look at costs for HOA insurance…
First, you’ll need to consider the insurance premium. The premium is essentially a fee for your insurance coverage. The premium can be paid upfront, or, it can be split throughout the term of the policy. You can talk to one of our licensed brokers for your options when you buy HOA insurance.
Secondly, you’ll need to look at the deductible. This is a separate fee that is paid when you need to make a claim for loss or liability. Coverage will not kick in until the deductible has been paid. Depending on the type of insurance that you buy, it may come with a higher deductible or premium. The right one for you depends on your needs.
- Higher premiums typically attract lower deductibles. This means that there will be fewer out of pocket costs if you need to make a claim against your policy.
- Higher deductibles typically attract lower premiums. You will pay less throughout a calendar year. However, if you need to make a claim, your out of pocket expenses will be significant.
There’s a balancing act involved with determining the right structure for your homeowner’s association. If you don’t expect to make any claims, but still want the peace of mind that comes from having coverage, then lower premiums will probably be your best option. However, if your organization has a history of needing to file insurance claims, you may want to choose an option that has a higher premium with lower deductibles.
The exact options available will depend on the specific insurance products that you buy, the risk associated with your organization, and your history of claims and litigation, etc.
To get the most affordable insurance, you will need professional representation in the market. An insurance broker is the best way to get reasonable rates with a policy or HOA insurance package that works for you. Moran Insurance will work on your behalf to secure the best insurance options, no matter what your unique needs are. If you want to have complete confidence when running your association, it’s time to talk to us.
Moran Insurance for All Your HOA Coverage Needs
Our friendly and professional team can help you get the insurance you need for your property or business at a price that is within your budget. While being properly covered by insurance costs money upfront, having coverage is essential and will save you money long term. Reach out to our experts today for answers to all your insurance questions and let us help you get the insurance coverage you need.