Beyond Basics: Umbrella Insurance for Comprehensive HOA Protection

For homeowners associations (HOAs), the right insurance coverage makes a difference in financial peace of mind and stability. Most associations need property and liability insurance to protect the association in the event of damage or injuries. However, many HOAs can benefit from umbrella insurance as well. These policies extend liability coverage beyond the limits of standard property and casualty coverage, protecting HOAs from liability if a loss exceeds the policy limits. Understanding the basics of umbrella coverage will help you better protect your HOA clients.

Understanding Umbrella Insurance for HOAs

Umbrella coverage is an excess liability policy that provides broader protections than the liability coverage within other policies, such as property and auto insurance. The liability on those policies strictly covers losses associated with that policy, such as the association’s property or vehicles. 

Umbrella coverage extends liability to cover losses that either exceed those standard policy limits or don’t fit those policies specifically. It covers legal defense costs, settlements, property damage, and injury liability.

Homeowners associations often face unforeseen complications and potentially expensive liability claims. With structural considerations, common area maintenance, and even property improvement and repairs, there are many areas where an HOA could face liability issues. In addition, HOAs can face lawsuits for defamation, invasion of privacy, and discrimination. Umbrella coverage can protect the association in these cases.

When offering excess liability insurance, we assess crucial factors such as establishing suitable liability limits based on the community association’s specific risks and covered items. For example, this policy extends coverage for directors and officers liability and includes protection for employment practices liability if it falls under the D&O policy.

Advantages of Umbrella Insurance for HOAs

The coverage limit extensions provided by umbrella coverage ensure ongoing protection for HOAs even when the coverage limits of primary policies are insufficient for a claim. When HOAs face a catastrophic event or unforeseen liability, the umbrella policy automatically covers the additional liability costs beyond the primary policy’s threshold. 

Because HOAs may face significant claims for large-scale property damage or major accidents, this additional coverage provides peace of mind in those extraordinary circumstances.

Tailoring Umbrella Coverage to HOA Needs

Determining the right amount of coverage for your HOA clients starts with carefully considering the association’s assets. Evaluate the collective community assets to determine how much is at risk in the event of a loss. Make sure the association has enough coverage to protect those assets in the event of a claim. 

You should also consider the size and nature of the community. Factor in amenities, shared public spaces, and routine public gatherings, as all those things increase risk factors. 

Collaborating with the right insurance providers will help you ensure adequate coverage for your HOA clients. Work with an industry professional to evaluate the risk assessment and identify the coverage limits and types that the community needs. You should also understand the association’s risk tolerance and factor that into the coverage.


HOAs must understand their liability risks and the value of umbrella insurance. Communicate with your clients about their exposure levels and the prevailing risk factors so you can better tailor coverage for each specific community. Tailored, customized coverage ensures the association’s long-term peace of mind and financial stability.

About Kevin Davis Insurance Services

For over 35 years, Kevin Davis Insurance Services has built an impressive reputation as a strong wholesale broker offering insurance products for the community association industry. Our president Kevin Davis and his team take pride in offering committed services to the community association market and providing them with unparalleled access to high-quality coverage, competitive premiums, superior markets, and detailed customer service. To learn more about the coverage we offer, contact us toll-free at (855)-790-7393 to speak with one of our representatives.