HOA - INSURANCE COVERAGE

Adrian, contact insurance brokers to get answers.

There are only a few insurance carriers that cover HOA's. Last count was about 8 - 10 nationwide last I was quoted once. We used Travellor's insurance. The insurance wasn't that cheap and we worked a deal to pay the premium for 10 months a year at about 1500+/-. We had a small clubhouse, pool, and officer's coverage. The good news is we could have a playground at no extra cost if we chose to.

It's a good idea to know the replacement cost of any structure you may have on the property. Remember the land is already paid for so it is just the structure replacement. The officer protection should reflect the largest payout (in general) that the HOA would pay out if it were to be sued. Ours was only around $60K. Not much and definetely needed an upgrade. As far as earthquake, flood, or natural disasters - find out IF your in these zones first. We weren't in a flood zone so it wasn't recommended to have. However, EACH owner should cover their own property/houses. The earthquake/flood insurance should cover only the HOA's property itself like clubhouse, pool, other structures...

Know what you want covered prior to looking up quotes. It will save you some time and money. Our insurance policy had a place for a HOA vehicle. We didn't have a vehicle for the HOA. Which meant that was a useless part of our policy we were paying for. However, with corporate policies they do tend to "bundle" such coverages together regardless if you have a need for it. The only good news was that IF a HOA board member was to have an accident in their own vehicle conducting HOA business the insurance may covered the difference between the personal insurance and the damages. So there was some benefit but you need to chose wisely if it is worth it.

Our HOA does not own an property. We do enforce CC&Rs and architectural changes. Our management company says our $10,000/year officers policy is a good deal. It seems like a lot of $$ to me.

Marie

We paid about 2K for 10 months for coverage for a clubhouse, pool, and officer coverage. It doesn't hurt to shop around. I would make sure the coverage is appropriate. Our requirment for Lawncare Contractors was a Million Dollar policy minimum and bonded. Most damage that occurred involved our Lawncare and NOT our officer's actions. Which is what your policy is covering not any property damage.

Example: One of your board members changes a light bulb at the front entrance on behalf of the board. However, they leave the old lightbulb on the ground where a member steps on it. It slices their foot and need medical care. That board member PERSONAL assets can't be touched. They can't be sued as an individual. The injured person would have to present the bill to the HOA board to pay and have a case against the WHOLE. Most likely would turn into an insurance claim in the end.

If the board member did NOT have permission to change that bulb or board approval, then that board member as an individual would have been responsible. Most likely their home owner's insurance would handle the claim since you may not have common property.