Most people that live in a townhome or condo belong to a homeowner’s association, or HOA. However, you may also belong to an HOA if you live in a gated community of single-family dwellings.
Unfortunately, many homeowners mistakenly believe that their HOA takes care of many of their insurance needs, when they actually don’t. Being part of HOA definitely impacts your insurance, but does not eliminate the need.
If you don’t understand what’s covered when something goes wrong it could lead to a lengthy, costly, and unnecessary insurance dispute with your HOA.
Condos & Townhomes
Normally, the HOA covers the exterior structure of the building as well as communal areas such as the parking lot, recreation room, lobby, swimming pool, and other community areas. Generally, coverage ends where your interior structure begins. The cost of the HOA insurance is split between all owners and included in the HOA dues.
However, coverage can vary greatly between HOAs. As a homeowner, you should review your association’s documentation to determine what coverage you need for your home.
If you can’t make heads or tails of this information, talk to an independent insurance agency like ours. We will recommend adequate coverage for your personal contents and belongings and ensure you have sufficient liability coverage to protect you if an event in your unit leads to damage in a neighbor’s home.
If your building has a catastrophic event, your HOA may not have enough coverage to make all the repairs. Consequently, each homeowner will be asked to pay their portion of the difference through a one-time assessment.
Unfortunately, this assessment is often a significant amount. Fortunately, your insurance agent can arrange coverage for loss assessments so you won’t be stuck paying the bill.
Even though you own a single-family home, your HOA normally only applies to the common areas such as the streets and paths and recreational facilities. Some also cover your front yard and your sewer and drain lines. However, you will need to review your HOA’s documentation to understand who is responsible for what.
Once again, give us a call. Our agents can recommend adequate coverage and will probably recommend loss assessment coverage should the area face a catastrophic event.
Your HOA may or may not have coverage from risks such as flooding and hurricanes, and may even exclude roof damage. Your agent will review your documentation and may recommend removing exclusions of your own policy. This may come at an additional cost, but it’s much more affordable than the alternative.
If a time comes that you do need to a file a claim, be certain you will know who is responsible for damages so you can file with the appropriate company. Damage caused by a neighbor is filed under your neighbor’s insurance. If you mistakenly initiate a claim under your own insurance, it could increase your rates.
However, living within the boundaries of a homeowner’s association can also have perks. You may qualify for insurance discounts and pay less. Give us a call, today. Our agents will check that you’re receiving all of discounts that you deserve.