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Many homeowners associations carry a general liability policy with a $1 million limit. That amount may sound like a lot of protection, but a serious accident, lawsuit, or injury claim can become expensive very quickly. When medical bills, legal defense costs, lost wages, and settlement demands are added together, a $1 million policy may not go as far as the board expects. HOA umbrella insurance, also called excess liability insurance, is designed to add another layer of protection above the association’s underlying liability policies. This can help the HOA protect its budget, reserves, board members, and homeowners from the financial impact of a large claim. Here are the common reasons an HOA should consider whether […]

When a homeowners association reviews its insurance program, one of the most important coverages to understand is HOA General Liability Insurance. Within that policy, the section often described as “Premises & Operations” plays a major role in protecting the association from everyday liability risks. Premises and operations coverage is designed to help protect the HOA when a claim arises from the ownership, maintenance, or use of common areas, or from the normal activities of the association. In simple terms, this is the coverage that may respond when someone is injured in a common area or when the HOA’s operations accidentally cause damage to someone else’s property. For many associations, this coverage is just as important […]

Many HOA board members assume that auto insurance is only needed when the association owns a truck, van, maintenance vehicle, or security vehicle. This is a common misunderstanding. Even if your HOA does not own any vehicles, the association may still have an auto exposure when someone drives for HOA business. This can include board members, volunteers, property managers, or employees using their personal vehicles for community-related errands. Here are the basic elements that an HOA should consider when deciding whether auto insurance is needed.   HOA-Owned Vehicles If the association owns, leases, or titles a vehicle in the HOA’s name, then the HOA will usually need commercial auto insurance. This may apply to maintenance […]

There are many kinds of insurance that a homeowners association may need to protect its buildings, common areas, board members, funds, and day-to-day operations. One coverage that is sometimes overlooked is HOA worker’s compensation insurance. HOA worker’s comp is designed to help protect the association when an employee is injured or becomes ill because of work-related duties. This may include medical expenses, lost wages, disability benefits, occupational illness claims, and certain employer liability situations. Workers’ compensation rules vary by state, but many employers are required to carry coverage once they have employees. In Illinois, for example, employers are generally required to provide workers’ compensation insurance for almost everyone hired, injured, or whose employment is localized […]

There are standard questions that we ask when helping an HOA or condominium association review its property insurance. One of the most important questions is also one of the easiest to overlook: Are your buildings insured for the right replacement cost today? HOA building valuations are not the same as market value, tax value, or the price someone paid for a unit. The insured value should reflect what it would cost to repair or rebuild the association’s covered property after a major loss, based on today’s construction costs, materials, labor, building codes, and policy requirements. In general, your HOA should review insured values every year and consider a professional replacement cost appraisal every three to […]

There are many questions that an HOA board should ask when reviewing its HOA property insurance. Most boards look closely at the building limit, deductible, premium, and whether roofs, common areas, clubhouses, fences, elevators, or other shared property are included. One coverage that is often overlooked is ordinance or law coverage sometimes called building code upgrade coverage. This coverage can matter after a covered property loss when the association is required to repair or rebuild according to current building codes, not the codes that existed when the property was originally built. Ordinance or law coverage is generally designed to help with losses caused by the enforcement of laws or ordinances that regulate construction and repair […]

There are important questions that every HOA board should ask before choosing or renewing an HOA property insurance policy. One of the most important questions is whether the association’s buildings and common areas are insured on a replacement cost basis or an actual cash value basis. In simple terms, replacement cost coverage may help an HOA repair or replace covered property without subtracting depreciation, while actual cash value coverage usually subtracts depreciation based on age, condition, and useful life. For HOA boards, this difference can affect claim payments, reserves, deductibles, and possible loss assessments after property damage. This may sound like a technical insurance detail, but it can have a major effect on how much […]

There are many details that an HOA board must consider when purchasing HOA property insurance. One of the most important details is the amount of insurance carried on the buildings and common areas. If the coverage limit is too low, the association may discover at claim time that the insurance company will not pay the full amount of a covered loss. This problem is often connected to a coinsurance clause. Coinsurance is a property insurance provision that encourages policyholders to carry a reasonable amount of insurance. If the insured does not maintain the amount required by the policy, the insured may have to share a larger part of the loss. Here are the basic things […]

There are standard questions that we ask HOA boards, condo associations, and property managers when reviewing an HOA property insurance policy. One of the most important questions today is: what deductible can your association realistically afford? In the past, many associations treated the deductible as a small detail. Today, the deductible can be one of the biggest financial planning issues in the entire HOA master policy. An HOA deductible is the amount the association must pay before the insurance carrier begins paying for a covered claim. This may apply to the building, roofs, common areas, clubhouses, fences, pools, garages, mechanical systems, and other association-owned property, depending on how the policy and governing documents are written. […]

Many HOA boards look closely at the insurance premium, total building limit, and covered property. However, the deductible can be just as important, especially when the policy has a separate wind or hail deductible. A wind/hail deductible is the amount the association must pay before the insurance company begins paying for a covered wind or hail claim. For an HOA, this can apply to roofs, siding, gutters, fencing, clubhouses, garages, shared structures, or other property the association is responsible for under the master policy. HOA property insurance, often called an HOA master policy, is designed to help protect buildings and common areas the association is responsible for. It may include coverage for roofs, hallways, lobbies, […]

When someone buys a condo, one of the first insurance questions is usually simple: “If my HOA already has insurance, do I really need my own condo policy?” It is a fair question. Condo owners pay HOA dues, and part of those dues often helps pay for the association’s master insurance policy. From the outside, it may seem like the building is already insured, so the individual owner should not need much more. But condo insurance usually does not work that way. In most cases, condo owners still need HO-6 insurance even when the homeowners association has a master policy. The HOA’s policy is mainly there to protect the association, the building, and shared areas. […]

Choosing the right HOA master policy can feel confusing, especially when terms like bare walls, walls-in, and all-in start getting used. These coverage types all deal with the same basic question: Where does the HOA’s insurance responsibility stop, and where does the unit owner’s responsibility begin? That answer matters. It affects premiums, claims, deductibles, owner expectations, and how smoothly the community handles property damage. In general, bare walls coverage is the most limited, walls-in coverage offers a middle ground, and all-in coverage provides the broadest protection. However, the right choice depends on your association’s governing documents, property type, budget, risk tolerance, and overall claims strategy. For HOA and condo association boards in Illinois, understanding the […]

Rebuild Cost vs. Market Value Choosing the right amount of homeowners insurance usually starts with one question: how much would it cost to rebuild your home if it were badly damaged or destroyed? That number is often different from your home’s market value, purchase price, tax value, or mortgage balance. For homeowners insurance, one key number is the cost to rebuild the home after a covered loss. This is often called the rebuild cost or replacement cost estimate. It is different from market value. Quick Answer Most homeowners need enough homeowners insurance to cover the estimated cost to rebuild the home, replace personal belongings, pay for temporary living expenses after a covered loss, and provide […]

There are standard questions that an HOA board, property manager, or homeowner may have when reviewing an HOA master policy. We created this explanation of common HOA property insurance terms and association details to help your community better understand what may be covered, what may be excluded, and what information can help us prepare a better insurance quote. An HOA master policy is designed to help protect the buildings, common areas, and certain liability exposures that the association is responsible for. It may cover shared structures, common elements, and association-owned property, but it usually does not cover everything inside an owner’s unit. Every association is different. Coverage can depend on the governing documents, property type, […]