Every house purchase in a select homeowner’s association will feature a conversation between the HOA and insurance agents. Insurance policies are a necessary part of life. Also, they offer financial protection from losses, damage, accidents, and even lawsuits. There are many types of insurance available.
Part of your HOA dues goes toward a collective policy that provides coverage for any physical damage to shared spaces. Additionally, you get liability coverage if a guest sustains an injury.
The HOA and Insurance Agents
HOA Insurance policies are often more confusing since they cover public areas. Regardless, the residents of the homeowner’s association must understand what the master policy covers and what coverage they need with their private homeowner’s insurance.
Another common misunderstanding is who has control over the HOA. Here we will look deeper into the relationship that insurance agents have with the HOA and what, if any, control they can exert.
What Is the Relationship Between an HOA and the Insurance Agents?
A homeowners association consists of a group of local residents who address problems and enforce the rules set for the community. They are typically elected and do not receive pay. Part of the responsibility of the HOA is to keep an active master insurance policy to cover legal issues, repair costs, and potential medical bills associated with an incident that occurred in a common area.
The HOA board works with an insurance agent while shopping around and purchasing a policy. The community maintains the ability and freedom to choose the policy and insurer they want. Alternatively, they also must comply with all terms of their selected policy. The HOA must find the best possible coverage at affordable rates and build a good relationship with the insurer.
Do the Insurance Agents Have Control Over the HOA?
HOA insurance agents don’t have direct control over how the homeowners association is set up or run. They do, however, have control over the terms of any insurance policy that you purchase. Before committing, you must read the bylaws and understand what your master policy covers.
Many policies have uncovered property sections, circumstances that don’t qualify the HOA to file a claim, and coverage limits. An insurance agent can deny a suit that doesn’t meet the criteria of the agreed-upon policy, even if the exclusion was not apparent.
Always get the terms of any agreement in writing. Don’t rely on verbal reassurances of what the policy will cover. Questions should be documented and answered in writing as well.
HOA board members can face liability if homeowners do not purchase the proper coverage. However, it is why it’s essential to understand the responsibilities of all parties and the coverage limitations of the selected policy. Board members must take action to research the best policies. Then, they must make their choice based on the regulations and preferences of the HOA.
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.