Homeowners Associations (HOAs) are common in many residential communities, and they often carry their own insurance policies to protect the common areas and community assets. However, understanding what is and isn’t covered by the HOA’s insurance policy is crucial for homeowners to ensure they have the right personal coverage. Here’s a breakdown of what you need to know about HOA insurance and what’s typically covered.

1. What is HOA Insurance?

HOA insurance refers to the coverage that a homeowners association buys to protect the common areas and shared property within the community. This insurance typically covers structures and property that belong to the HOA, not individual homes or personal property.

2. What Does HOA Insurance Cover?

The specifics of what an HOA insurance policy covers can vary, but it generally includes the following:

a) Common Areas and Structures

• Buildings and Common Areas: This includes things like clubhouses, pools, gym facilities, roads, and landscaping. If the HOA owns any buildings (e.g., a recreation center), those would be covered by the HOA’s insurance.
• Shared Property: The HOA’s insurance typically covers any shared property that is used by the community, such as parking lots, walkways, or green spaces.
• Liability for Common Areas: The HOA’s insurance covers injuries that occur in common areas. For example, if someone slips and falls in the community pool area, the HOA’s insurance would likely cover the liability.

b) Property Damage and Loss

• Storm Damage: If a storm damages common property, such as a roof of a shared building, or if a tree falls onto a community structure, the HOA’s insurance would typically cover the repair or replacement costs.
• Vandalism or Theft: If common areas or HOA-owned property are damaged by vandalism or theft, the HOA insurance would often pay for the repair or replacement.

c) Director and Officer (D&O) Insurance

• Protection for the HOA Board: Directors and officers of the HOA are typically covered by liability insurance (D&O) in case they are sued for actions taken while managing the association. This helps protect the board members from personal liability for decisions made during the course of their duties.

3. What is Not Covered by HOA Insurance?

While the HOA’s insurance covers common areas and some types of liability, it does not cover everything. Here’s what is typically not covered by the HOA’s insurance:

a) Individual Homeowner’s Property

• Personal Property: The HOA’s insurance doesn’t cover any of the personal property inside your home. Your furniture, electronics, clothing, and other personal belongings are not covered. Homeowners need their own insurance (typically a HO-6 policy for condos or a standard HO-3 policy for houses).

b) Homeowner’s Liability

• In-Home Liability: If someone is injured inside your home, the HOA’s insurance won’t cover this. You’ll need your own liability insurance to cover injuries that occur within your home.

c) Homeowner’s Dwelling Coverage

• Structural Damage to Individual Units: If you live in a condo or townhouse, the HOA’s insurance will typically cover the exterior and common areas, but not the interior of your unit. For example, if your roof or walls are damaged by a storm, the HOA’s policy would likely cover repairs to the shared structure, but you would need your own insurance to cover repairs inside your unit.

d) Flood or Earthquake Damage

• Natural Disasters: The HOA’s policy may not cover damage from floods or earthquakes. Most HOA insurance policies exclude natural disaster coverage, and you may need to purchase separate flood or earthquake insurance if you live in a high-risk area.

4. What Do You Need to Do as a Homeowner?

While the HOA carries insurance for shared property, homeowners still need to protect their individual homes and personal property. Here’s what you need to know about what your homeowners insurance covers and what steps you should take:

a) Get Homeowners Insurance

• Dwelling Coverage: Your homeowners insurance will cover your home’s structure (interior and exterior) against covered events like fire, theft, and vandalism. For condos, this would generally cover the interior of the unit, including walls, floors, ceilings, and appliances.
• Personal Property: This covers your personal belongings, such as furniture, electronics, and clothing, from loss or damage due to a covered peril like fire, theft, or vandalism.
• Liability Coverage: This provides protection if someone is injured while visiting your home and you’re found legally responsible. For example, if someone trips over a rug in your living room, your liability coverage would help pay for medical bills and legal fees if you’re sued.

b) Review the HOA’s Master Insurance Policy

• Understand What’s Covered: Take the time to read through your HOA’s insurance policy to understand what common areas and property are covered. This will help you understand which areas of the property are protected and where you may need additional coverage.
• Check the Deductible: The HOA’s insurance policy may have a high deductible, which could affect how quickly or easily damages are paid out. If major damage occurs, you may have to contribute to the repair costs if the deductible is high.

c) Ask About “Walls-In” or “Walls-Out” Coverage

• Walls-In Coverage: For condo owners, it’s important to determine if the HOA has a walls-in policy, which covers the interior walls, floors, and ceilings. If the HOA only covers the exterior structure, you’ll need to cover everything inside your condo with your own insurance.
• Walls-Out Coverage: This refers to the coverage the HOA provides for the exterior of the buildings and the common areas. It typically doesn’t include interior walls or personal property, so make sure to understand the specific details of your HOA’s coverage.

d) Consider Special Coverage Needs

• Flood Insurance: If you live in an area prone to flooding, your HOA insurance likely doesn’t cover flood damage. You’ll need a separate flood insurance policy through the National Flood Insurance Program (NFIP) or a private insurer.
• Earthquake Insurance: Similarly, if you live in an earthquake-prone area, you might need to purchase earthquake insurance on your own.

5. How to Avoid Gaps in Coverage

• Communication with the HOA: If you’re unsure about what’s covered by your HOA’s insurance, ask for clarification. Understanding the limitations of their coverage will help you ensure that you’re not left underinsured.
• Supplemental Insurance: If your HOA’s policy doesn’t cover certain risks (like flood or earthquake), consider adding supplemental insurance to your homeowners policy to fill those gaps.