Planned unit developments (PUDs) are communities — often single-family homes, townhomes, or condos — where owners belong to a homeowners association (HOA). The project may also include recreational or commercial elements governed by shared documents. Understanding how PUD insurance protects these communities is critical for insurance agents serving HOA clients.
Unlike standard homeowners or condo policies, PUD coverage addresses the complex shared risks that arise when diverse property types and amenities exist side by side. By recognizing these exposures, agents can identify priorities, address common challenges, and leverage Kevin Davis Insurance Services’ (KDIS) specialized products to strengthen client relationships.
What Does PUD Insurance Cover?
At its core, planned unit development insurance focuses on the community association’s exposure, not individual unit owners or commercial tenants. Kevin Davis Insurance Services offers a suite of specialty products aimed at protecting associations’ governance, financial assets, and emerging risks.
- Directors and officers (D&O) liability: Shields board members against alleged wrongful acts like fiduciary breaches, with options for non-monetary and defense-outside-the-limits coverage
- Crime insurance (fidelity): Protects association funds against theft or fraud by board members, staff, or third parties, depending on policy terms
- Excess liability: Boosts protection beyond what primary general liability or D&O policies might cover, guarding against catastrophic exposure
- Cyber liability: Responds to data breaches, ransomware, or other cyber threats, covering costs like forensic investigation, notifications, defense, and extortion
Because PUD structures vary, reviewing covenants, conditions, and restrictions (CC&Rs) to confirm what property the association is obligated to insure is essential. In many PUDs, owners insure their own structures, while the association covers only common property. For more, see KDIS’s resource on understanding PUD vs. condo insurance.
Identifying and Addressing PUDs’ Unique Insurance Needs
Blending homes, retail, and recreational facilities creates exposures beyond traditional HOAs. Shared pools, parking structures, and fitness centers create overlapping responsibilities that can complicate claims. Tailored insurance strategies help protect associations from financial losses while managing liability, property, and governance risks.
According to the National Association of Realtors, PUDs are governed by legal agreements between developers and local authorities, requiring adherence to standards for health and safety, design quality, and land use. These added regulatory and governance layers make specialized coverage essential for protecting community associations.
Challenges Insurance Agents Face When Covering PUDs
Even experienced agents can run into obstacles. Challenges include:
- Misinterpreting governing documents
- Overlooking exposures tied to shared property
- Miscommunicating with association boards
For example, consider a PUD with both residential units and ground-floor retail. If governing documents don’t specify whether the association, unit owners, or tenants are responsible for roof maintenance, coverage gaps can arise.
In mixed-use settings, agents should confirm insurance and maintenance obligations in easements or CC&Rs. They should also check that contracts include additional insured and waiver-of-subrogation provisions. By taking these steps, agents can help clients avoid costly disputes and strengthen their advisory relationships.
How To Tailor PUD Coverage for Your Clients
One way to spark meaningful board discussions is to use a simple “governance scorecard.” While not an industry standard, it gives agents a practical way to highlight where gaps may exist.
Boards can be rated from 1 to 5 in areas such as: maintenance obligations clarity, reserve funding adequacy, liability assignment in shared-use facilities, board communication practices, and claims history transparency. Low scores in any area signal governance challenges that could lead to insurance gaps or disputes.
Agents should also recommend coverages that boards may overlook. Cyber liability is critical because general liability policies do not cover data-breach costs — cyber coverage responds to both forensic expenses and third-party liability. Also, employment practices liability insurance, written on a claims-made basis, protects associations that hire staff or contractors. Finally, many carriers offer optional third-party coverage for claims by residents or vendors.
Protecting PUDs With the Right Coverage
Understanding PUD governance and exposures allows agents to deliver value beyond standard HOA insurance. When evaluating a program, consider these questions:
- Have the governing documents been reviewed thoroughly?
- Are all common areas and amenities insured?
- Is liability clearly divided in mixed-use scenarios?
- Do reserve funds align with long-term maintenance needs?
- Are policy limits tied to accurate replacement cost valuations, with ordinance or law included if appropriate?
- Do shared-use agreements require additional insured status or waivers of subrogation?
By asking the right questions, agents can close coverage gaps and build lasting trust with boards. Contact Kevin Davis Insurance Services to review your clients’ programs for tailored solutions.
FAQ for Agents on PUD Insurance
What is PUD insurance?
PUD insurance is coverage designed for community associations in planned unit developments, protecting against property, liability, and governance-related risks.
Who needs planned unit development insurance?
Any board managing a PUD — primarily residential, commercial, or a mix — should carry this coverage to safeguard shared property and association responsibilities.
How should agents present PUD insurance to clients?
Agents should highlight the community’s blended nature, explain potential gaps from unclear governance, and show how specialized coverage from KDIS helps prevent costly claims.
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.