Are homeowners associations required to carry insurance?

Started by KatherineP • 9 replies • 3071 views

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KatherineP (West Virginia)
Posts: 13

Posted:

I'm getting conflicting information as to whether Home Owners Associations are required to carry liability insurance in my state (West Virginia). Another issue related to this is that my HOA has an arrangement with certain community members to perform work on our individual properties (path area) - they are however not licensed and bonded. What happens if they have an accident and which to file a claim - who is responsible?

MaryA1 (Arizona)
Posts: 7,043

Posted:

Katherine,

Contractors should be required to carry workmen's comp in case one of their workers is injured on the job. I know many HOAs carry workmen's comp for the very reason you state. The HOA would be resp. if there was no workmen's comp.

An HOA is a corp and, as such, should have adequate insurance. Bein a corp protects the prop. owners against liability issues; however if there is no liability ins then the burden would fall back on the prop. owners. Check your gov. docs; most state what types of ins the HOA is resp. for carrying, such as liability, D&O (directors and officers), a fidelity bond for any person handling $$$ and perhaps workmen's comp.

SusanW1 (Michigan)
Posts: 5,202

Posted:

I'd say that the type of "work" makes a difference.

If there is heavy machinery required, then yes, get a licensed contractor. If it's just mowing and clearing and cleanning, then volunteers could probably do that. There have been many discussions on this board about the type of "work" that volunteers should be doing around the HOA.

RogerB (Colorado)
Posts: 5,067

Posted:

Katherine,
All Covenants of which I am aware require the HOA to carry insurance. it is important to carry liability insurance regardless of whether it is required in the Covenants. Liability insurance should be required and a copy provided for paid workers and depending on the circumstances the HOA should carry Workers Comp. For volunteering members of your HOA always get a signed release before allowing them to do that work.

KatherineP (West Virginia)
Posts: 13

Posted:

Thanks to everyone - one point about signed release waivers - about 1/2 of the volunteers are under the age of 18 - many under the age of 10

TishS (Washington)
Posts: 116

Posted:

If a home owner has financed through Fannie Mae. Their PUD rider requires that the homeowner makes sure the HOA has insurance.

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

Quote:

Posted By KatherineP on 08/16/2010 9:30 AM
Thanks to everyone - one point about signed release waivers - about 1/2 of the volunteers are under the age of 18 - many under the age of 10

When an accident happens, release waivers are worth nothing. A lawyer can easily prove negligence (failure to provide training, safety equipment, etc). Also, any contract a minor (under 18) enters into is not valid anyway. They are not adults.

KatherineP (West Virginia)
Posts: 13

Posted:

Thanks to everyone :-)

I found out they did not even sign wavers. Now I'm wondering how can I find out if this community has insurance?

GlenL (Ohio)
Posts: 5,491

Posted:

Quote:

Posted By KatherineP on 08/17/2010 7:21 PM
Thanks to everyone :-)I found out they did not even sign wavers. Now I'm wondering how can I find out if this community has insurance?

From your other posts I'm thinking you might still be under Declarant control so it may be a little more difficult but just ask the Board to review the insurance policy. We are a COA and all homeowners receive a letter from the agent each year showing the policy is in effect and what the limits are. If they give you any static over reviewing the policy, you might check the WV statutes on non-profit corporations, there probably is some statute there giving you the right to inspect.

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MaryA1 (Arizona)
Posts: 7,043

Posted:

Glen,

As a matter of clarification, in a planned community the ins agent will not send the ins policy to all the members for review. I think this might only happen in a condo assn, such as yours.

Also, while under declarant control the HOA may not have their own liab ins but rather be covered under the declarant's co. policy. This is the way it was in my former assn while we were still under declarant control. I would think that if any one knew the importance of carrying liability ins it would certainly be a developer (the declarant), but of course I could be wrong. There are some dumb businessmen out there!

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