Every homeowners association should have a comprehensive insurance policy for unexpected troubles. Unfortunately, not all HOA boards are familiar with HOA community insurance.
What to Consider When Getting HOA Community Insurance
One of the challenges HOA boards must manage is what kind of insurance that their association has. It is essential to maintain coverage for major expenses your association may face. Part of that process is carefully researching what kind of insurance policy to invest in. When deciding on an HOA community insurance policy, take the following considerations into account:
1. Property Damage
Depending on the type of homeowners association that you have, you may have common areas that your residents utilize regularly.
An excellent way to save capital on funding the entire cost of repairs is to get HOA insurance. This way, you can cover various damages that may happen to these common areas.
However, property damage is not limited to common areas. If there is damage to a light fixture in your community’s entryway, for example, you will need an insurance policy for that.
It is best to find an HOA insurance policy that covers different kinds of property damage. That way, you can ensure all your bases are covered. Failure to do so can result in the association incurring major expenses. These are funds that would have been directed towards more beneficial community improvements.
Another risk that any HOA faces is the risk of theft. Granted, the properties of residents are at the risks of the residents or their landlords that hold the tile. However, where the line gets blurry is what happens to assets stolen from common areas and who is fiscally responsible. If an association can invest in the right HOA insurance policies, it can save them a great deal of capital and help them to replace these items that have been stolen from common areas within their communities.
Given that many communities have common areas where residents spend time, injuries are bound to occur. It could be someone slipping in the community pool area or cutting themselves from a protruding nail. HOAs need to cover their costs by investing in homeowners association insurance that will cover potential resident injuries.
Associations that fail to invest in insurance may be subject to lawsuits if the resident can show that their injuries occurred as a result of not properly maintaining common areas. HOAs must also exercise caution when it comes to performing scheduled maintenance. This way, you can eliminate potential injuries as well as find adequate coverage to protect your association from fiscal liability.
4. Legal Liability
The reality that many HOAs have to face is that the nature of their operations may subject them to legal liability from their residents.
Board members should consult with insurance experts with prior experience dealing with associations. Ask them about which potential insurance policies would be ideal for their association and their particular needs.
Insurance experts will take into account the geographic region where their association is located along with the overall size of the HOA. From this preliminary information, the insurance provider will assess what kinds of common areas there are along with prior records (if there are any) of the issues that the association faced with the residents of the community.
From there, the association insurance provider can assign an accurate quote of what the HOA community insurance policy will cost. You must then carefully assess the HOA insurance provider that you select to represent your community. By doing so, you can ensure that they are a precise fit for the needs of your HOA.
5. Local Weather Conditions
Depending on which part of the country where your HOA is located there may be weather risks that pose an active threat to not only the safety of your residents but also the overall safety of your community as a whole.
It is important to have a risk assessment of the various weather conditions that may pose a risk to the residents within your community and ascertain how they may make your HOA liable.
If your HOA is located in a region where there are hurricanes or tornadoes, then it is important to ensure that the insurance policy that your HOA acquires has adequate coverage for the common areas of your community. Failing to obtain insurance can cause major financial hurdles for your HOA if a natural disaster hits that your HOA had not financially planned for previously.
Make sure to carefully consider HOA insurance policies that have extensive offerings related to extreme weather conditions. By doing so, you will be setting your HOA up for success to not have excessive expenses in the event of a severe weather emergency.
Assess Your Insurance Coverage
As a member of your HOA board, you have a duty to maintain the community, and that involves ensuring your insurance coverage is up to standard. To do that, you must evaluate your existing policies and remedy any gaps you find. Make sure to get the most of all of your HOA community insurance policies.
For instance, if major property damage occurs, will your provider fully cover the cost of repairs? Apart from that, it is essential to make sure no conflicts exist between your home and common property insurance policies. If something happens, your policies should clearly lay down who should cover the expenses.
Seek Professional Advice
Part of running a homeowners association is making sure to safeguard the community. That includes getting the proper HOA community insurance coverage for all possible risks, such as property damage, theft, potential accidents, and legal action. Not all HOA boards come equipped with the right knowledge and experience to handle such a tall task. In that case, it is important to consider getting professional help in the form of a lawyer or HOA management company.
If your association is looking for the right HOA management company to partner with, make sure to take Elite Management Services into account. You can reach out to us anytime by filling out our online contact form or calling at (855) 238-8488 for a free proposal.
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