Living under a homeowners association (HOA) comes with its own perks and downsides. Whether in a condo community or housing neighborhood, a homeowners association often provides security, landscaping, and basic services such as vent and window cleaning. It also means homeowners must follow certain bylaws and maintain a specific appearance on the outside of their property. The homeowners association is required to carry homeowners association insurance, different from homeowner’s insurance or condo insurance that is carried by each individual owner. Typically, association dues paid by each owner go to cover the cost of homeowners association insurance.
What you Need to Know about Homeowners Association Insurance
Find out what your Homeowners Association Insurance covers-and what it does not.
The most common kind of Homeowners Association Insurance policy falls under the category of “studs-out coverage”, which means that it covers everything from the studs out including the roof, siding, balcony, landscaping, the building elevator, etc. The individual owner will need homeowner’s or condo insurance to cover everything inside the studs including structural elements such as flooring.
If you live in a community that provides “all-in coverage”, however, it will typically protect the outside of the building plus the structural elements inside your unit. In this case, you will likely need less individual insurance; a policy to cover belongings may be sufficient.
Does Homeowners Association Insurance Cover Liability?
Many HOA Insurance policies do cover liability for injured guests that get hurt in the community’s common areas such as the pool, playground, or lobby. You will need to ask specifically if your community’s policy would also cover an injury for a guest inside your unit.
What Type of Remodeling/Repairs does HOA Insurance Cover?
Most all HOA Insurance will cover renovations and repairs to the outside of the building including repainting siding, fixing cracks in the sidewalks, etc. Some policies, however, will also cover basic improvements/renovations/repairs to the inside of a unit.
Do I Need Loss Assessment Coverage?
Your HOA Insurance policy should cover property damage to the building and common areas up to a certain limit. Depending on the fine print, a homeowner may end up on the hook for making up the difference in cost to repair the damage from a severe incident. An owner can protect themselves from this by carrying loss assessment insurance in their condo/homeowner’s insurance policy.
Am I free to Choose Whatever Homeowner’s Insurance Policy I want?
Some HOAs will stipulate minimum insurance coverage for owners, or even from what company the insurance should be purchased. Ask this question before purchasing the unit to make sure it will be the right fit.
Son-Rise Property Management is a full service property management company located in Bellingham, WA. Contact us today to see how we can help you find the perfect home to rent or manage your property.
