HOA Insurance

I am getting ready to bid out insurance for my HOA. I'm pretty new at this and was hoping to get some suggestions. Any advice on the best place to look?

Thanks,

Wes

There are not a whole lot of insurance companies that offer HOA insurance. Traveller's is the one we used. They allowed us to spread out our payments longer so they fit into our budget. A consideration if your on a shoestring budget. It may cost more to do it billing wise as they may charge a fee to do it that way. However, if you can't fit a normal payment it may work for you. (We paid 10 months a year)

Heads up that many will only offer Bundles type of insurance. You may not use everything in the bundle but to get it you have to buy the whole bundle. Which is not necessarily a bad thing. In our case we did not own a HOA vehicle but it was part of our insurance. However, what it did mean was if a board member was in an accident while doing HOA business, it would pickup the difference in what your personal insurance did not. Basically covering your deductible.

Also be aware of your property replacement values. If you have a clubhouse, have an idea of what it would cost in replacement in today's prices. Your HOA wants the insurance to cover atleast 80% of that replacement cost. The other 20% your HOA budget may need to pick up. The percentage of coverage of replacement plays a factor in how much they charge in some cases. You may find agreeing to pay 20% will lower your insurance payments and will allow to save the money collecting interest in a bank account.

Insurance should provide for protecting Board members from personal lawsuits. That is another factor beside property. You want to make sure to have that liability portion built in. It's basically why your HOA should have insurance.

Make sure you compare apples to apples.

Start with your existing policy and ask what it will cost for the same amount of coverage.
They can add options, but they should list those separately from the amount you are requesting.

Additional, with D&O (directors and officers) insurance, you need to know if the legal coverage is inclusive or exclusive of the coverage.

Inclusive means that the legal costs are covered as part of any award.
Exclusive means that the legal costs are covered regardless of any award.

Example, went to court and lost.
Legal costs were 25,000 damage award was 50,000

You have a $50,000 policy.
Inclusive means the Association would have to pay $25,000 (total cost less policy coverage)
Exclusive means the Association would not have to pay anything (cost of award less policy coverage)