Insurance
Also known as: HOA Insurance, Master Policy
Coverage purchased by the association to protect against financial losses from property damage, liability claims, and other risks. Common HOA insurance policies include property insurance (covering common areas and buildings), general liability insurance, directors and officers insurance, fidelity bonds, and workers compensation. Individual homeowners must carry their own policies for personal property and interior coverage.
Example in Context
After a visitor slipped on ice in the parking lot, the association's general liability insurance covered the $50,000 settlement, minus the $5,000 deductible paid from the operating budget.
Common Misunderstanding
The HOA master policy does not cover the interior of your unit or your personal belongings — individual homeowners must carry their own HO-6 policy (or equivalent) for that coverage.
Frequently Asked Questions
What insurance does an HOA need?
At minimum, most HOAs carry property insurance (covering common area structures), general liability insurance, directors and officers (D&O) insurance, and a fidelity bond (protecting against employee or volunteer theft). Workers compensation may also be required if the association has employees. The specific coverage requirements are typically set by the governing documents and state law.