In single-family managed associations, insurance boundaries can also be murky if a residential property borders common areas, walls, or a community’s gate. This is especially important for associations that manage condos and townhomes, since large portions of the structures in question will be the association’s responsibility. The governing documents will also tell you what property the association is responsible for insuring. Governing documents usually mandate insurance requirements by specifying the minimum amount that’s required.

See what your association’s governing documents say about insurance.

Checking that your insurance complies with your state’s statutes protects the HOA from any potential legal action.

Examine state legislation (or ask your association’s lawyer) to determine state-mandated insurance requirements.

Below are our ten tips to familiarize you with the basics of HOA insurance: As overwhelming as the process is, there are basic steps that boards can follow to make choosing the correct insurance policy easier. But, picking the best insurance policy for your association, when you’re responsible for the financial resources of hundreds of homeowners and millions of dollars of property? That can really be daunting. Loris Moradian Insurance Agency is an expert in common interest development insurance.Picking the best insurance policies for yourself can be intimidating. Let us help you determine what coverage limits are right for your association.

Some factors that should be taken into consideration are the number of units in the association, the amenities you offer (pools, hot tubs, gyms, playgrounds, etc.), what percentage of units are rented, the condition of the premises, and your history of claims and losses. Liability claims have no limits other than those imposed by the courts, so it is very important for board members to evaluate the need for your particular community. Many associations obtain an Umbrella Liability policy that would kick in after the commercial general liability amount up to the actual value of the property. Of course, these coverage limits are just minimums and your association may require more than the minimum amount of coverage.

If the association has more than 100 separate interests, the minimum level of insurance is $3,000,000 per occurrence. If the association has 100 or fewer separate interests, the association must carry $2,000,000 of coverage per occurrence. It does not protect board members from claims that their actions have damaged the association or its members – this would require Directors and Office Liability insurance.Ĭalifornia Law requires associations to carry a minimum level of insurance.

Homeowners’ associations must have commercial general liability insurance to protect the owners from exposure to liability from accidents or injuries that occur in the common areas of common interest developments, such as a slip and fall on a wet driveway, an injury sustained on playground equipment, etc.Ĭommercial general liability insurance covers four types of claims: bodily injury resulting in actual physical damage or loss property damage or loss from the operation, maintenance or use of common areas personal injury, such as false arrest, libel, slander, defamation of character and invasion of privacy and advertising injury, such as infringement of copyright.

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