When you live in a community that is controlled by a Homeowners Association (HOA), it can be difficult to determine where your personal insurance policy fits into the HOA insurance mix.
What is included in the association?
What are you responsible for?
And how do you avoid there being any coverage gaps?
One of the common issues we help clients with at e360 Insurance Services is the confusing relationship between homeowners insurance and homeowners association insurance. Here’s what you need to know.
What Is HOA Insurance?
HOA insurance—also called a master policy—is a policy purchased by the homeowners association to cover shared spaces and structural elements within a community. This might include:
- Exterior walls of buildings
- Roofs
- Hallways, elevators, and stairwells
- Landscaping and fences
- Clubhouses, pools, and other shared amenities
- Liability for injuries on common property
Essentially, homeowners association insurance protects the portions of your property that you share with your neighbors (or that are owned collectively).
What Does Your Homeowners Insurance Cover?
As an owner in a community managed through a homeowners’ association, you are still responsible for insuring personal property and, most generally, the inside of your unit. This typically includes:
- Personal items (furniture, electronics, clothing, etc.)
- Interior walls, floors, and ceilings (depending on the HOA policy type)
- Fixtures and appliances
- Coverage for accidents that happen within your home
- Additional living expenses if you’re displaced temporarily because of a covered loss
It is crucial to understand where the HOA’s responsibility ends and yours starts.
Types of HOA Master Policies
Not all homeowners association insurance policies are the same. Knowing what type of association you hold can help you determine what kind of individual coverage you need.
1. Bare Walls Coverage
This covers only the basic structure: exterior walls, roof, and shared spaces. Homeowners are responsible for everything inside their unit, including plumbing, electrical, and interior walls.
2. Single Entity Coverage
This policy covers the structure and standard finishes (such as flooring or countertops originally installed by the builder) but not any upgrades or personal property.
3. All-Inclusive (All-In) Coverage
This is the most comprehensive, covering the building structure, original fixtures, and upgrades within your unit. Still, it won’t cover your items.
Tip: Reach out to your HOA and request a copy of their master insurance policy so you can make sure you understand what is and isn’t covered.
Why You Still Need Individual Homeowners Insurance
Even if you have a strong homeowners association insurance policy, your own homeowners insurance, which is often referred to as a HO-6 policy, is still important for a few reasons:
- It protects your personal property.
- It covers interior repairs and renovations.
- It offers personal liability protection.
It can cover loss assessments, where the HOA charges members for damages exceeding the master policy’s limit.
Without individual coverage, you may face out-of-pocket expenses for losses inside your home—or even for damages in common areas if you’re held partly responsible.
What Is Loss Assessment Coverage?
Under some circumstances, the HOA will assess a special assessment to pay for a significant repair, liability claim, or disaster that is above the limits of the master policy. That cost may be passed on to homeowners.
That’s where loss assessment coverage, which is an optional endorsement to your homeowners policy, and it comes in handy. It helps pay for these unforeseen charges so you’re not stuck with a surprise bill from your HOA.
Final Thoughts
Realizing the relationship between HOA insurance and individual homeowners insurance is crucial in protecting your investment. While the HOA’s policy might address common areas and structural elements, it is your personal policy that protects your items, your interior space and your peace of mind.
Here at e360 Insurance Services, we can help you find coverage that works for you, your home, your HOA, and your budget. If you want to find out and are not certain you have the coverage you need, our professional agents are one phone call away.
Let’s Talk Coverage
Whether you’re purchasing a new home in a homeowners association community or evaluating your current policies, reach out to e360 Insurance Services today.
We’ll get you covered, all the way around!