HOA coverage refers to insurance coverage provided by a Homeowners Association (HOA) for a residential community or condominium complex. The purpose of HOA insurance is to protect the common areas and shared elements of the community, as well as to provide liability coverage for the association itself. The specific coverage and details can vary, but there are typically two main components:
It is important to note that while HOA coverage protects common areas, it does not extend to the interior of individual units. Unit owners are usually responsible for obtaining their own insurance.
HOA coverage is funded through the association fees paid by homeowners. The specific terms and coverage limits of the HOA insurance policy should be outlined in the association’s governing documents, and residents should familiarize themselves with these details to understand what is covered and what additional insurance they may need for their individual units.
Directors and Officers insurance coverage covers legal defense costs and financial protection for board members and officers in case they are sued for alleged wrongful acts in managing the association. Fidelity Bond protects the association against theft or embezzlement of association funds by board members, staff, or volunteers.