Your property is one of the most important investments you can have and many Homeowners Associations respect this. You could find however, that the HOA that represents you is looking to use your HomeOwner Fees to purchase Homeowners Association insurance coverage which is in addition to your usual home insurance policy. Such coverage can be a particularly good idea in the event of various circumstances like natural disasters, which can be a frequent occurrence if your home is in an area that is prone to extreme conditions, like floods and earthquakes.
Your HOA should have a Board of Directors which reviews the circumstances of homeowners like you before they make an executive decision to use your homeowner fees to invest in a policy. It can be difficult to determine whether you are under-insured or over-insured in a policy, so extra care must be taken to ensure that an adequate amount of coverage is established.
If you are helping in the efforts, be sure that your HOA looks around as many different insurance companies as possible, because you can find that some policies include additional features which give you better value for homeowner fees. Comparing quotes can help you to find the most cost-effective policy for your HOA’s budget without having to be compromised on the amount of protection you have. There is no point paying a small amount of money for a policy that won’t cover you in a certain situation.
Many people completely misunderstand what the purpose of HOA insurance is, with some people believing that the insurance provided by a Home owners Association is a replacement for the standard buildings and contents insurance that many people purchase for their property. Unfortunately, this is not the case and most HOA policies are intended to act as an additional precautionary measure.
For example, some Home owners Association insurance policies are intended to insure facilities which have been established for communal use, like swimming pools, tennis courts and so on. As you will have established, premiums aim to cover any costs that may arise from damage caused to such facilities.
As with all types of insurance, there can be a fair few opportunities for a Homeowners Association to get a variety of additional covers like liability insurance. These add to the premium and in some cases are wholly unnecessary, which means consulting an insurance broker, who is well-versed in insurance policies and insurance companies which can protect a HOA.
Their advice can be invaluable and can even go some way to recommending types of cover to associations based on the decisions of other HOAs that are similar in size and in circumstances. By going on precedent, you can go onto make successful decisions knowing that others have done the same.
Homeowners Association insurance can bring a whole new dimension to insurance policies that you may not have seen before. Ensuring that your organization takes the time to mull over the options available now can prevent any dire implications from under-insurance at a later date which could prove devastating.