When you belong to a homeowners association, you’re responsible for paying monthly HOA membership fees. A portion of your HOA membership fees pays for the community's shared HOA insurance, as well as general maintenance and upkeep to common areas and other shared amenities. Show
Also known as a master policy, HOA insurance covers physical damage to any structures or shared spaces owned by the HOA. It also covers any liability expenses the HOA is responsible for, like if a guest is injured in a shared area, such as the community pool. To determine your own personal home or condo insurance coverage needs, you’ll need to look over the HOA master policy to see what’s already covered. Key takeaways
A homeowners association is an organization or community development to which members pay fees for certain services. As a home or condo owner in an HOA, you’re also subject to rules and regulations instituted by the member-elected HOA board. Usually, there are two different types of HOAs that you can be a member of:
When you pay your HOA dues, that money goes to everything from maintaining and improving community areas to security and surveillance services to HOA insurance, which is also known as your community’s master policy. How does an HOA master policy work?As a member of an HOA, not only do you pay for use, maintenance, and renovations to common areas, you also pay for a collective HOA insurance policy, also called a master policy. It works like this. Every member pays an equal amount toward the HOA insurance policy, given that everyone in your HOA has equal access to the same common areas and amenities. If part of a shared area — like the lobby, gym, or structure of the building itself — is damaged by a covered peril, like a fire or windstorm, the HOA master policy will pay for the repairs. Whether or not you have to pay a master policy deductible depends on your HOA and the extent of the loss. Every member has to pay into the HOA insurance policy. Even if you don’t frequent the rooftop patio or park your car in the garage, you’re not exempt from your share of dues or insurance claim expenses related to those common spaces. HOA insurance policies vary in terms of coverage. Some master policies provide a certain level of coverage to individual condo units as well as common areas, while others cover the bare minimum — meaning only the condo building and shared spaces. In either case, you’ll need your own condo insurance policy to complement your master policy. How much personal condo insurance you need directly relates to what kind of master policy you have. What does HOA insurance cover?Your HOA master policy should, at the very least, cover any shared spaces and structures owned by the HOA. As a member, you’re typically covered for:
Consider your liability coverage limits when purchasing a condo insurance policy. A master policy likely won't cover you if you cause an accidental injury to someone inside your individual condo unit. Make sure you have enough liability coverage in your personal condo insurance policy to cover your assets in the event of an expensive lawsuit. 3 types of HOA insuranceThere are generally three types of master policies, and which type you have will determine how much personal condo insurance you need. 1. Bare walls in coverage: A bare walls in master policy provides minimal coverage for the structure of the condo. It basically covers everything behind the condo walls, including the drywall itself, studs, and insulation, but not much else. This is the most basic type of master policy. 2. Single entity coverage: Also known as walls in or studs in coverage, single entity master policies include all the same building and common area protection as bare walls, but coverage for the interior structure of your unit extends to the outside of the walls, top flooring, cabinets, and bathroom fixtures. 3. All-in coverage: An all-in policy is the most comprehensive type of master policy. It covers everything that a single entity master policy covers, but extends coverage to built-in appliances. All-in policies may also extend coverage to alterations and unit improvements that you made. If you have an all-in master policy, you may not need to add any dwelling coverage to your individual condo insurance policy. HOA insurance vs. condo insuranceAlthough HOA insurance provides some coverage for the structure of your condo, your master policy won’t cover your furniture, clothing, jewelry, electronics, and other belongings. You’ll want to make sure you have enough personal property coverage to cover their replacement cost. Your condo insurance typically includes:
In an ideal world, your HOA insurance and your condo insurance policies would complement each other perfectly. But sometimes, you might find yourself overpaying. What happens if I'm overinsured? In some cases, your mortgage lender may require more condo insurance than you actually need. If you have an all-in HOA insurance policy, you likely don’t need that much — if any — dwelling coverage in your personal condo insurance policy, since your master policy already includes coverage for built-in appliances and the structure of your condo unit. Condo insurance can cost as little as a couple hundred dollars a year and as much as $1,000 a year, but if you’re paying anywhere north of that, your coverage may be overlapping with your HOA insurance. HOA insurance vs. homeowners insuranceIf you belong to an HOA for single-family homes or subdivisions, your home insurance coverage won’t differ too much than if you weren’t in an HOA. Your HOA insurance coverage doesn’t extend to the structure of your home, so your dwelling coverage isn’t impacted by the master policy like condominiums are. However, there are a few things to keep in mind when getting coverage for a home in an HOA:
Get your condo insurance quoteOnce you know the ins and outs of your HOA master policy, you’ll be better prepared to select the correct amount of coverage and get a condo insurance quote that doesn’t break the bank. If you don’t have your HOA master policy, contact your condo association to retrieve a copy. You can reach out to one of our licensed insurance experts at Policygenius. We can look through your master policy and make sure you’re not overpaying for coverage while running your condo insurance quote. Yes, condo HOA membership fees partially go towards the HOA insurance policy, or master policy. That said, you will need your own personal condo insurance policy ontop of the HOA policy. How much condo insurance you need will depend on which type of HOA master policy you have. An HO-6 policy is the policy
form name for condo insurance. It is a type of home insurance for condo-owners, and it protects structural improvements to your condo, your personal belongings, personal liability, and losses assessed by your HOA. How much HO-6 insurance you'll need depends on what type of HOA insurance policy you have. Which of the following would not be considered an insured under a homeowners policy?Termites and insect damage, bird or rodent damage, rust, rot, mold, and general wear and tear are not covered.
Which of the following could be covered by a homeowners policy?A standard policy includes four key types of coverage: dwelling, other structures, personal property and liability.
What is the meaning of occurrence under section II of the homeowners policy?Section II of a typical homeowners policy contains a provision whereby your insurance company agrees to defend and indemnify you for damages you become liable to pay a third-party for certain “bodily injury” or “property damage” that results from an “occurrence.”
Which of the following is not eligible for a homeowners policy quizlet?Which of the following would not be eligible to purchase a Homeowners Policy? A person who owns and lives on a farm -- Homeowners eligibility does not include farm property, but does include certain incidental business occupancies.
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