If you are a property owner in a condominium, townhouse, or another type of association-governed housing community, you may have already received information about the purchase of homeowner’s insurance to protect your home.
At least one person probably has suggested that you need to get HOA insurance because your property is part of an association community subject to the rules and regulations established by that governing body. That may be true, but there are other reasons why you might consider buying this type of coverage even if your community doesn’t have an HOA. Here are some possibilities:
You are thinking about renting out your home
Even associations with no plans to create additional rental space for residents can be subject to higher insurance premiums if any homes within their boundaries are used as rentals. This is because it creates more risk for the association; therefore, they will need more security and safeguards. If your community already has it, purchasing associations insurance would become even more important since associations purchase policies that cover all of their members at once. The coverage is also broad, including personal liability and loss of use.
You live in an area prone to extreme weather conditions
If you live in an area that is prone to extreme weather conditions—like hurricanes, blizzards, heavy rain, or hail—or any other disaster that could damage many properties at once, then it becomes more important than ever to protect your home. The cost of repairs after a natural disaster can be astronomical. HOA insurance might help you avoid paying for things like roofing repairs, foundation cracks, and broken windows out of your pocket.
If you have expensive items in your home, such as jewelry or antiques, then HOA insurance might be a good idea for another reason: Most policies offer loss of use coverage if there is damage to your property—meaning you may not have to pay out of pocket for the extra expenses of staying elsewhere while your home gets fixed up.
Your neighborhood has recently been targeted by thieves
Are break-ins becoming more common in your area? HOA insurance can protect you against the loss of valuables that may reside inside your home. Many policies cover such things as jewelry, furs, artwork, and collectibles up to a certain amount. Even if you live in an area where the risk is relatively low for this type of thing happening, you should consult an insurance agent about acquiring HOAs insurance. It would give you some peace of mind since it will reimburse you for any losses beyond what a standard homeowners’ policy would pay for.
Your community has special assessment projects in the works
If your association is planning to make improvements to the community you live in, such as putting in a pool or clubhouse, it’s important that everyone pitches in equally. The cost for this type of work is usually covered by assessments. If you signed up for these expenses when they were proposed and failed to pay, an HOA insurance policy can protect possible legal action taken against you if the project goes through.
Also, if your community is likely to charge special assessments for other imminent work, such as roof repairs or an HOA insurance policy can help protect you against legal action taken against you if you fail to pay.
Your property is located near a known risk
If your home is near a military base, is located close to an airport, or is adjacent to a chemical plant, you may want to consider HOAs insurance. These types of risks can affect a larger geographic area than just those properties that are part of the association which means that everyone in the neighborhood could be impacted if something were to happen. If association insurance doesn’t cover this type of risk, an HOA insurance policy might be a good option to consider.
You have increased your coverage limits recently
If you have recently increased the amount of personal property inside your home, due to a new addition by way of marriage or birth, it’s important to keep your policy coverage current. This may be especially true if you are carrying high-end valuables like an engagement ring or artwork. Your HOA insurance should protect you in case these things are damaged or stolen because most policies offer a limit on certain perils, such as jewelry theft.
Additionally, if you have taken up a hobby that involves expensive equipment—such as scuba diving—upgrading your homeowners’ association insurance might help protect against potential theft or damage from this type of activity. You also need HOAs insurance if you plan to store hazardous materials inside your units, such as paint thinner, gasoline, or fireworks.
Your neighbors do not maintain their properties correctly
If you have a neighbor who is not keeping their property in good shape, it could lead to problems for everyone living in the area. For example, if they fail to cut overgrown trees and vegetation gets blown onto your property during a stormy period, you could be responsible for paying for cleanup costs.
If they allow their grass to grow too high and it causes damage to common elements such as pools or sidewalks, you may have to pay for repairs since HOA rules typically state that individual residents are responsible for maintaining their units. To protect yourself against these types of scenarios—and any other possible liability claims—an HOA insurance policy would protect in many instances when others’ negligence leads to financial loss
In some states, it is required by the law that you carry HOA insurance
If your state requires HOAs to purchase insurance for their boards, it is probably a good idea that you do the same. Some states—including Illinois, New Jersey, and Florida—require mandatory coverage on the part of all homeowner associations. This type of protection may be especially important if your HOA plan includes liability protection for illnesses, lawsuits, or injuries incurred by association members. With this type of policy in place, individual unit owners would not have to pay out-of-pocket costs associated with claims made against them. These legal actions would be covered under their umbrella policy.
If one of these instances pertains to your current situation, you must talk with your insurance agent today about updating your policy. Not only will this help protect your assets and personal liability, but you might end up saving money on your premiums.