HOA Insurance and Capital Reserves Question

Hello, and thank you in advance for any info provided.

Is it a standard practice for HOA insurance to cover a community's retention ponds? They are part of our storm water management system and the HOA is responsible for their maintenance and repair. We have a situation where a sink hole was "diagnosed" and the pond did not function properly -- there was also a tear in the liner which is now being replaced. This resulted in a special assessment of residents to pay for the repairs. I'm not sure why it wasn't considered a capital reserve expense and paid for from our capital reserve fund. Could we have had insurance to cover the retention pond? I was just wondering if it is typical for a standard HOA insurance policy to cover the ponds or should there be additional insurance purchased for that type of coverage.

Thank you, and have a safe Memorial Day weekend.

Peg,

It would depend on the language in your policy.

Typically, sink holes are an addendum to a policy.
Expecting that the damage was caused by a sink hole and the HOA policy did not cover sink holes, I doubt the policy would cover.

That said, my association carries liability policy for the common area. Any damage replacement is self insured by the HOA. This would include anything for our storm water management structures.

I suspect that unless your association has significant structures (clubhouse, pool, etc.) that your HOA only carries liability as well. If your Association does have those structures, the policy probably only covers those items and not the retention ponds.

You would need to read your policy to know.