HOA Insurance

While carrying insurance to protect your community is important, it’s also important to use the policy properly. Unlike personal home and auto insurance, the types of claims that an HOA may file can vary greatly and understanding when to file a claim vs. pay for something out of pocket isn’t always easy. To help you navigate your HOA insurance we’ve compiled a few pointers!

Know your coverage

Sit down with your insurance agent and make sure your community is properly insured. While no one wants to pay for extra insurance they don’t need, there is nothing worse than needing to use a policy that doesn’t cover the extent of damages. You’ll want to make sure you have adequate (and maybe a little extra) coverage for things like flood, fire, general liability, D&O liability, and other types specific to your region/needs. Insurance is not something you want to cut corners on to save money.

It’s not a maintenance policy

If you regularly submit “maintenance” claims that meet or barely exceed your deductible to save some money, you’ll likely find yourself dropped by your insurer. Filing a small claim once every few years isn’t going to cause you trouble, but too many claims will hurt your relationship with the handful of companies who offer competitive insurance for HOAs. You’ll either find yourself unable to get proper insurance or you’ll be paying high premiums. It’s just not worth the risk.

Know when to assess the owners

Sometimes you’re not limited to filing or not filing a claim. Generally HOAs allow for special assessments that temporally increase HOA dues in order to resolve an issue. For example – if several common area trees are killed due to an early freeze or bug issue, the HOA can assess owners for the funds necessary to replace the trees. In cases like this, you’ll find the situation is resolved easier and with less risk than filing a claim.

File when you have reason

Sometimes filing a claim is obvious, like when natural disasters strike, so don’t waste time filing your claim. Any delay can cause headaches down the road as you try to collect from your insurance. You carry insurance for a reason, so use it when you know it’s appropriate.

Know your resources

If you ever find yourself scratching your head over a possible claim, don’t hesitate to contact your property management company. Their experience should allow them to help you weigh the pros and cons to help you come to the best decision possible. If you don’t have a property management company, or you’re not totally happy with the one you use, don’t hesitate to give Spectrum a call.

Outside of obvious disasters, like a flood or fire, it can be tough deciding whether to file an insurance claim. And while this post can’t possibly answer every insurance question, we hope it helps! If you’re struggling with a specific problem and need some guidance, we’d love to chat with you!