New Year’s Insurance Checklist for HOAs

HOAs must carry insurance to protect themselves and their communities against liability claims, including damages to shared amenities and property. The new year is the ideal time for agents to speak with HOAs to reassess their insurance policies, mainly because many may need to renew or update their policies in the new year. Insurance should be a significant part of an HOA risk mitigation plan.

Review Current Coverage

HOA insurance can aid HOAs in avoiding costly claims while assisting with financial and legal burdens when claims arise. Common liability claims HOAs face include:

  • Harassment
  • Remodeling disputes
  • Discrimination
  • Cybercrimes

Policies come in all shapes and sizes, tailored to individual HOAs. For example, some HOAs may want to focus on crime and crime insurance, whereas others may need errors and omissions coverage. As the new year approaches, agents should encourage HOAs to review existing policies to ensure they align with their needs and budgets.

Policies sometimes require updating as a community grows and changes. While evaluating the insurance coverage, discuss coverage limits, exclusions, and deductibles and how they will affect the overall price and the policy limits. To receive optimal protection without compromising the budget, HOAs should renegotiate their contracts and cut unnecessary expenses.

Assess the Property

Real estate valuations will help HOAs determine how much protection they need. Various formulas can help HOAs determine the value of their properties.

The HOA should create an updated inventory that includes all community assets, improvements to the property, and renovations. As communities grow, their assets may also increase, and updating the insurance to reflect the changes can help prevent underinsuring the organization.

HOAs may also want to conduct a risk analysis. During a risk analysis, you must identify possible environmental, safety, and security risks.

Practice HOA Risk Mitigation

HOAs that want to reduce their risk of a liability claim need to take steps to mitigate their risks.

Safety Measures

HOA risk mitigation should include proactive safety measures, such as removing diving boards from swimming pools or posting rules on play equipment to discourage unsafe play.

Community areas require regular inspections. Licensed individuals should perform inspections, and the HOA should keep documentation of each.

Safety initiatives can lower insurance premiums. When an organization has proactive safety measures, the insurance company perceives it as less risky, and the HOA may benefit from lower rates.

Disaster Preparedness

Think about the disasters that your community has a higher risk of facing. For example, all HOAs should have a plan for fires, earthquakes, and other natural disasters. A well-prepared community can reduce insurance claims and associated costs because they know how to mitigate the risk and keep the community safe.

Legal Compliance

Rules and regulations change yearly, and HOAs must stay updated on all changes to ensure compliance. Talk to HOAs about any legal consequences of non-compliance, and encourage insurance coverage that can protect and help them remain in compliance with different regulations.

Help Your HOA Clients Prepare for 2024 With HOA Risk Mitigation

To prepare for 2024, HOAs should have a comprehensive HOA risk mitigation plan with proactive steps and comprehensive insurance policies covering a variety of liabilities. To learn more about HOA insurance, contact us today.

 

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.