Property insurance

What is Property Insurance in a Homeowner Association?

Property insurance, also referred to as homeowners insurance, is a policy that provides coverage for private homes and the items within. It offers financial protection against disasters, theft, and accidents. A standard policy insures the home’s structure and the personal belongings of the homeowner. Liability coverage protects the homeowner against accidents in the home or on the property.

In the context of a homeowner association (HOA), property insurance generally refers to a master policy provided by the HOA, which covers common areas shared by the homeowners such as lobbies, elevators, swimming pools, gyms, and external structures. This insurance differs from individual homeowner insurance, which covers the interior of the condo or townhouse and personal belongings.

Importance of Property Insurance in a HOA

Property insurance in a HOA is crucial because it covers significant potential costs that can arise from unforeseen events like fires, storms, or vandalism that affect the common areas. Without this insurance, the burden of these costs could fall on the individual homeowners within the association, who might be required to contribute significant sums to cover the repair or replacement costs.

While each individual homeowner is responsible for carrying their own insurance policy for their unit and personal belongings, the HOA’s property insurance provides an additional layer of protection. It is important for homeowners in a HOA to understand what their association’s property insurance covers and what they are personally responsible for.