insurance questions

Most of this is in your insurance policy and should ask the insurance agent to go over it with you. However, you are correct IF the court judgement is over the coverage limit that the entire HOA is on the hook for that overage. Hence, why I say "Suing your HOA is suing yourself and your neighbors".

Don't assume a $1 million dollar policy pays out $1 million dollars. They don't. There is a cap on the amount paid out on claims. Ours was about $80K from our policy. So that is important to find out what the actual protection amount is that your insurers will pay out.

The insurance covers board members PERSONAL assets. A homeowner can't go after a board member's PERSONAL assets for a decision they made as a board member representing the HOA. Doesn't mean one can't file that claim. It will probably be tossed out. Anyone can sue for anything at anytime, doesn't make it true or winnable...

I would be more concerned about the property being properly covered. Our clubhouse covered for only $80K. Today's construction it couldn't be replaced for less than $100K. So the HOA would have to be on the hook for the $20K difference. I would make sure to have your HOA's property assessed every few years to make sure the insurance coverage would cover it in a loss.

The same thing with a lawsuit. Your HOA would have to cover the difference between the award and the insurance payout. That may involved a special assessment of all the owners including the one that sued to pay up. That then translates to those who refuse to pay that special assessment being subjected to liens. Which then causes another ripple effect.

Just go over the policy and see what is what. You may have a package plan that will include many items your HOA doesn't have like a car. However, it is part of the insurance package. Can't opt out. However, that type coverage does cover the gap between the insurance payout and out of pocket costs if an accident happens while doing HOA business. Another part of your policy to look at.