Do You Need Homeowners Insurance If You Live In An HOA?

HOA’s vs. Homeowners Insurance

If you’ve ever bought a home before, then you’re familiar with the process of insuring your home. Insurance is simple if any issue arises, your insurance covers the costs needed to fix the problem. If you’ve thought about living in a homeowners association because of  HOA lifestyle– community pools and gardens, beautiful neighborhoods, and the manicured lawns. And if you think that your HOA also covers everything your homeowner’s insurance would think again!

While it’s true that the fees you pay are normally used for maintenance, damages, and general beautifying of the community. The fees you pay every month are usually reserves for common areas that serve the interests of the entire community. We’ll be outlining insurance items that your HOA usually covers, why you still need your own homeowner’s insurance policy. Also, it is good to know what to do when your house gets struck by lightning, and if your covered.

Homeowners Insurance

To begin, homeowners insurance is something you need to have if you own a home. If you own a home already, then you’re are well aware of the importance of getting homeowners insurance. Homeowners insurance protects and secures the very roof over your head. From protecting against natural damages like flooding or tornadoes to robbery or injury that occurs on your property. Homeowners insurance gives you mental and financial peace of mind when you know your property is protected.

In an HOA, there are responsibilities of the HOA in terms of insuring certain areas in your subdivision. It is your responsibility, however, to make sure that your unit or your single family home is still secured. It’s unlikely that your HOA will cover everything that you actually need to be insured. It is wise to purchase policies for liability and insurance for your actual home. If you own many expensive items like jewelry or electronics, it might be worth getting those insured as well. Finally, they recommend securing insurance to cover any upgrades you make in your unit.

Homeowners insurance can be a pricey investment and many people choose to opt out of a home insurance policy. It’s a common thought that by living in an HOA that most insurance issued are covered by the HOA. Typically, HOA’s do offer a certain amount of coverage and protection to your home and neighborhood. Insurance agencies will see this as an added layer of protection, and will occasionally offer policies at a discounted rate.

Your HOA’s Plan

Just as you need your own insurance, so does your HOA to keep your community protected. Hopefully, you’ve decided to insure your home with a solid policy. Understanding where the HOA stands in terms of your coverage is equally as important. Knowing what they cover in addition to what your plan covers will ensure that there are no gaps and no chances of issues without a backup plan.

As a general rule of thumb, your HOA’s master insurance policy will typically cover anything that’s deemed common space in your neighborhood. Community parks, gardens, and pools, street maintenance, and recreational facilities. If you live in a condominium or townhouse, expect your HOA to insure any common areas there and all of the general building maintenance.

The easiest way to avoid any gaps in your coverage is to ask to see a copy of your board master insurance policy. The master insurance policy usually includes liability coverage, property insurance, Directors & Officers liability insurance, and workers’ compensation insurance. While the latter two serve the interest of the board themselves, the property insurance and liability coverage plans are there to make sure that homeowners are protected and will cover major repairs to the overall condominium or subdivision.

Bite the Bullet and Get it Covered

Understanding what kind of insurance policy you need for your home or living unit is relatively easy. As long as you first get a clear understanding of what kind of coverage your HOA will offer you. Most official documents held by any HOA are easy to access if you ask to review them. It is your right as a homeowner to know where your fees are going and how those fees are ultimately protecting you… It’s possible that certain things you thought were protected actually weren’t, and it’s your responsibility to choose to get those items protected.

Additionally, it’s just as important to understand that HOA’s are not in place to make sure that you are protected from every single thing. Purchasing a homeowners insurance policy is still in your best interest to have ultimate coverage across the board. Get familiar with what your HOA is willing to cover and what they won’t, and then start looking for an agency that can help build a plan that makes sense for you. Remember that one of the main perks of living in an HOA is the services they offer to the entire community but it’s still in your hands to make sure your space “in studs” is protected.