A homeowners association is an organization that helps maintain and regulate neighborhoods. People living within the community pay monthly fees that cover the maintenance of shared spaces and HOA repairs. These membership dues also pay for HOA insurance premiums to protect against risks like theft or property damage in the area.
HOA Fees During COVID
Recent data states that 73.9 million people live in communities with an HOA or condo community association. As members of these associations, residents are subject to specific rules and must pay dues. These payments contribute to many necessary aspects of the neighborhood, including:
- Maintenance and improvements of shared areas
- Security or surveillance services
- Utility bills for community or recreation buildings
- Landscaping costs
- Insurance policies
As you can see, HOA fees are an integral part of where your clients live. These associations typically run on a zero-based budget, meaning the community’s expenses match the amount of money received from homeowner fees. This system means that residents must continue to pay the monthly dues, even when amenities close because of COVID-19 restrictions.
HOA Repairs During a Pandemic
At the beginning of the pandemic, many association boards decided to postpone repair needs to minimize the spread of the COVID-19 virus. Since the onset, organizations are getting back to some routine maintenance and repairs after weighing the associated risks. Performing these tasks require additional safety precautions, such as:
- Reducing contact with residents
- Wearing facial coverings and maintaining a safe distance during projects
- Increasing sanitation and cleaning of public areas in the community
In some situations, HOA fees may increase during the pandemic. Communities face more expenses, such as personal protective equipment, hygiene necessities, and additional sanitation products for common areas. Also, there are costs associated with reopening previously closed buildings and incorporating the necessary safety measures.
HOA managers ensure communities run smoothly. They enforce regulations for property and landscape maintenance and safety rules for the neighborhood. They coordinate and schedule building and repair projects that improve public areas within the community. Directors and board members also manage the income generated from resident fees. These actions and decisions involve inherent risks that could result in legal claims.
HOA Insurance During COVID-19
While community associations have to make concessions regarding repairs and amenities because of COVID-19, adequate insurance coverage is still an essential expense. Comprehensive coverage can protect your clients from potential claims and issues, such as:
- Financial fraud
- Data breaches
- Liability issues
- Catastrophic events
- Wrongful acts
- Breach of fiduciary duties
COVID-19 has presented unique problems and risks for homeowners associations. It is vital to advise your clients regarding which policies and extensions mitigate the costs of these potential concerns. Insurance coverage for your HOA clients is crucial to prevent financial losses for the members of the communities.
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.