WHAT IS HOA INSURANCE?
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HOMEOWNERS ASSOCIATIONS BENEFITS Homeowners associations offer many advantages for their residents. These benefits involve the use of shared areas and amenities, such as gyms, pools, playgrounds, and clubhouses. Likewise, before buying a property in a residential community ruled by an HOA, potential buyers must know that these facilities require maintenance programs and repairs, and they are possible by the collecting of fees.
FEES
On the other side, these periodical fees enable your HOA to hire an insurance policy to protect common areas and enforce neighborhood rules to allow maintenance standards. In the same way, insurance, protect your HOA against liability claims. Hence, a master policy is a form of property and liability insurance that HOA members pay, and this payment is part of their membership dues.
NORTH CAROLINA AND SOUTH CAROLINA PLANNED COMMUNITY ACTS
According to both the North Carolina and South Carolina Planned Community Acts, homeowners associations require to have liability insurance from their first lot sale. This requirement includes a comprehensive policy that covers common areas against all risks of direct physical loss (storms, hail damage, fire, and explosion). The association is responsible for hiring this policy since it must enforce the rules and cover management expenses.
GENERAL LIABILITY
In addition to shared areas coverage, general liability is essential to protect your HOA from various types of incidents, such as property damage, injuries, and personal accidents within the community. Some policies may include “No exclusion for Discrimination (Fair Housing Act Claims).� Other coverages can protect the association when it comes to stolen property in the shared areas of the HOA since these events are prone to lawsuits.
CONDOS INSURANCE
Unlike HOAs insurances, condos insurance policies can cover individual units, and they include some structures such as bare walls-in policy (items behind the condo walls, such as plumbing, wiring, drywall, and others). Other modalities include coverage for fixtures, sinks, built-in-appliances, and countertops.
The purpose of “Commercial Umbrella Liability Policies� is to extend liability protection beyond the limits of underlying policies. It is important to note that this extra coverage not only complies with the Davis-Stirling Act General Liability insurance requirements, but it enhances the limits of liability coverage.
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