The Role of Insurance in Protecting HOA And Condo Associations

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Proper insurance is a significant need for homeowners’ and condo associations. With the right type and level of coverage, these entities limit their risk exposure, which can be invaluable in these trying times. HOA and condo association insurance covers general liability and property damage in common areas.

To determine their insurance requirements, clients must evaluate their current coverage and decide what to add or update. Here, we will examine the protective role of insurance for your condo association.

What is an HOA Master Policy?

Community master policies are bought by HOAs to limit their exposure to various liabilities. These insurance policies serve homeowners’ associations, but they also protect residents from the additional cost of repairs to common areas, which come as special assessments. HOA master policies typically include:

  • Property coverage. This portion of the policy covers communal areas in the event of vandalism, theft, flood, natural disaster, or fire. In most cases, buildings are covered from the ground up, including stairs, elevators, and siding. Some insurance policies cover interior elements.
  • Liability coverage. Here, clients are protected from liability associated with injuries and accidents occurring in common areas such as hallways, walkways, and private roads.
  • Fidelity insurance. This type of coverage protects HOAs and condo associations from the effects of theft by association members, contractors, and employees.
  • Officers and directors. Sometimes referred to as D&O coverage, this type of insurance protects trustees and officers from liability in the course of employment. Most insurance policies cover the legal fees incurred when defending an HOA board member in court.
  • Workers’ compensation. Workers’ comp covers HOA members and employees if they’re in an accident while serving the organization.

In the sections below, we’ll evaluate the role of condo insurance in the protection of associations.

Condo Association Insurance

When people live in neighborhoods with homeowners’ associations, protection from liability is clear-cut. HOA insurance protects shared spaces and dwellings. In the case of condo associations, however, things can get complicated because owners share a structure.

Those who own units are usually responsible for covering everything within their homes. Condo insurance offers one of several types of coverage found in a master policy, such as:

  • Bare walls. This section of a policy protects structural elements like floors, elevators, and walls. A unit owner must purchase coverage for kitchen and bathroom fixtures, cabinetry, appliances, and wall treatments. In bare walls coverage, owners may also be required to cover their interior walls.
  • Single entity.This kind of coverage protects a building’s basic elements and finishes. However, it will not cover improvements performed at the owner’s expense, such as lighting fixtures and flooring.
  • All-in. With all-in coverage, additions, fixtures, and installations within unit interiors are protected. Owners’ coverage requirements are rather limited because a condo association’s master policy offers comprehensive coverage for these elements.

Contact us today to learn more about these types of condo coverage.

Get In Touch

At Garrity Insurance, we work with brokers and agents to help condo and homeowners’ associations find the right coverage for their needs and their budget. For additional information on how we help associations reduce their risk exposure, visit us online. And, to learn now we can protect your association with customized coverage, call today to speak to one of our insurance experts.