When you move into a community that belongs to a homeowner’s association (HOA), you may be required to follow specific protocols and pay some extra fees. A portion of these fees will go toward HOA insurance you share with other members of your community.
You could encounter an HOA structure if you move into a condo, townhome, or a single-family home located in a planned community. Certain co-ops and neighborhoods also have homeowners associations. The goal of an HOA is to help maintain a particular atmosphere throughout a neighborhood for those who live there.
What’s an HOA?
An HOA is an organization that enforces set guidelines for multiple-unit buildings and planned communities. As a member, you may be tasked with certain responsibilities and required to follow specific rules.
HOA members often pay a monthly or quarterly fee for regular maintenance of their property and shared areas (pools, clubhouses, parks, gyms). Certain restrictions on what you can and can’t change about your home’s appearance and what vehicles you can park outside your garage may also apply. If you don’t abide by the rules, you could be fined.
Residents of an HOA community are elected to oversee and enforce the guidelines. Their duties may include maintaining landscaping and shared spaces, carrying out security services, and enforcing parking rules.
You can examine your HOA’s rules and regulations in something called a Declaration of Covenants, Conditions, and Restrictions. Before you can buy your property, you must agree to these terms and conditions.
Types of HOAs
- Single-Family Home in a Planned Community: Restrictions can vary significantly based on the community (e.g. retirement, upscale, gated, on a golf course, etc.).
- Condo: Restrictive rules apply. You own the interior but not the exterior of your home.
- Townhouse: Although typically similar to a condo owner’s policy, townhome coverage is subject to bylaws of the HOA, which may include the need for coverage of the interior and exterior of your home.
What is HOA insurance?
Your HOA exists to keep your neighborhood clean, safe, and beautiful. It also helps keep up your property value. To pay for the upkeep and safety of your community, you must pay membership dues that contribute to shared HOA insurance. This insurance offers some liability and property protection.
What’s an HOA master policy?
Your HOA needs to be insured in case a shared area is physically damaged or someone is hurt in a communal space. An HOA master policy covers property damage to protect common areas and liability insurance for injuries and legal fees.
It’s essential to look carefully at what this master policy covers for you and what it doesn’t. You’ll need to supplement any coverage gaps with your own insurance policy.
What does HOA insurance cover?
Master policies can vary among communities. This can cause confusion when taking out your own insurance policy to fully cover your home and belongings. Some HOA policies offer minimum coverage, while others are more comprehensive. “Bare walls” and “all-in” are two common types of HOA master policies.
- Bare Walls Policy: Covers the structure of your building and communal areas.
- All-In Policy: Covers everything a bare walls policy covers plus fixtures in your home and upgrades/modifications made by you or a previous owner.
Your personal insurance policy should supplement the insurance you already have through your HOA, filling gaps to ensure you’re adequately protected. You will typically find this through an HO6 policy. However, if you need more coverage than an HO6 provides, look at an HO3 policy instead. Pay special attention to the list of covered perils in your HOA policy and your HO3 or HO6.
Need help finding the right coverage for your home?
If you aren’t sure what type of insurance policy you need to cover your condo, townhome, or single-family home, we’d love to help you. We can help clarify what your current policy covers and what it doesn’t to help identify any coverage gaps and go from there.
Let us know if you’d like some quotes from different carriers we recommend for your situation. Contact us at any time. We’re here to help!