If you live in California, we can help you set up the proper coverage for your homeowners association. I have been a condo owner for many years and have also served on a board. If you are looking for an agent with first-hand knowledge, I’d be glad to discuss the insurance choices you face as HOA board members. Here are a few of the topics we can discuss, to make sure your HOA is sufficiently covered.
The Master Policy
The common studs-out policy covers the outside of the units, common areas, and any incidents that occur to the basic building structure. This policy can be modified to cover the inside of your units as often is required by the governing documents. This is often referred to as an all-in policy. An all-in policy will cover the structural elements and fixtures of each unit, leaving the owners to protect their own personal belongings, personal liability, and living expenses.
Also known as Difference in Conditions Insurance, this is an important policy to discuss as a board. It is not a required insurance, but is well worth considering when you live in the Bay Area or other earthquake prone areas of California and depending on the age of your building, location and number of units, the cost per unit is often very affordable. For example, in the 28 unit building where I live, we pay about $70 per month per unit for 12 million coverage.
Directors and Officers Insurance
As board members, D&O insurance is a must. Your general liability insurance will protect the association for things like trip and fall claims on the HOA property. The Directors and Officers insurance will protect the board members for things such as allegations of wrongful acts or discrimination or failure to procure the proper insurance.
Common Area Liability (General Liability)
The most common reason for lawsuits typically comes from people who sustain injuries while slipping and falling, or otherwise becoming injured while in a parking lot, stairs, or other common area. You will want to be certain that your association is protected from the expenses that can quickly arise due to the many possibilities of such accidents on the premises.
HOA Workers Compensation
This is another optional policy that your board would do well to consider. You may hire someone who is not insured that is injured on the premises or you may have a volunteer who takes on some tasks and becomes injured in the process, or some other unforeseen circumstance. Having this policy just may save your association from some unexpected lawsuits.
Having a good umbrella policy will provide additional limits of liability coverage in case of a large claim that exceeds the coverage limits on your General Liability or Directors Liability policies. Umbrella insurance can protect the homeowners from an unexpected bodily injury liability claim that would otherwise cause financial ruin to the HOA and unit owners.
As your board makes these important choices as to what types of coverage your association should have, I would be glad to answer any questions that arise. Give me a call, and we can go over the specific needs you face as an HOA in the San Francisco Bay Area or anywhere in California.