Is My HOA Required to Keep an Insurance Policy?
This is a question we often get asked by new (and sometimes inexperienced) board members. And in most cases, the answer is almost always, "Yes." But, why? Before we get into the specifics, we need to cover a few basics. First, why does an HOA have an insurance policy in the first place? An insurance policy serves to protect the assets of the association in the event of an unforeseen circumstance. Associations are created to cover the costs for maintaining and replacing the common elements and limited common elements. Depending on the type of the association, these may include: streets, sidewalks, gates, fencing, roofing, exterior siding, window shutters, and possibly even patios or decks. This can vary greatly from one association to the next and is typically defined in the association's governing documents. Some associations also have amenities - clubhouse, pool, tennis court, basketball court, playground, or a fitness room or gym. The association must budget for the ong...