Standard insurance coverages

Standard Insurance Coverages for Homeowner Associations

Standard insurance coverages for homeowner associations are designed to protect the shared areas and assets of the community, as well as the association’s directors and officers. These policies typically include property insurance, general liability insurance, and directors and officers liability insurance.

Property Insurance covers damage to the common areas owned by the association, such as clubhouses, swimming pools, and playgrounds. Coverage usually includes damage from disasters like fire, storm, theft, and vandalism. Some policies may also cover damage from earthquakes and floods, but these are often optional coverages that require additional premium.

General Liability Insurance protects the association against lawsuits and claims for bodily injury or property damage arising from the shared spaces. For example, if a visitor slips and falls in the common area, this coverage would help pay for legal costs and any settlements or judgments.

Directors and Officers Liability Insurance protects the association’s board members and officers against lawsuits related to their decisions on behalf of the association. This can include claims of mismanagement, breach of fiduciary duty, or failure to enforce rules and regulations.

Each homeowner association’s insurance needs can vary based on its bylaws and the nature of its common property. Therefore, it’s important for associations to work with an experienced insurance agent to determine the appropriate levels and types of coverage.