Do HOA Fees Cover All Property Insurance Bases?

Homeowner’s Associations (HOAs) are an increasingly common component of the home purchasing experience across the United States. HOAs are private associations, typically set up by neighborhood real estate developers to help market, manage, and sell homes in a residential subdivision. Owning property overseen by an HOA will come with mandatory monthly fees, which can range from tens to hundreds of dollars each month. Thankfully, these fees are intended to benefit you as a homeowner. HOA fees typically cover costs for security, amenities, maintenance, and even some forms of property insurance.

What’s included?

New homeowners or those who are paying HOA fees for the first time may think that the included property insurance with their HOA means they can forgo purchasing additional homeowner insurance.

An HOA’s master insurance policy is intended to ensure a minimum level of protection, usually applied to common areas and public amenities. This coverage, however, does not apply to what is inside a homeowner’s individual unit, whether it be a town-home, condo, single-family home, etc.

Typical master insurance policies included with your HOA fees will only cover damage to the exterior of your house, or “walls out.” This coverage will include the structure of the home, the roof, lobbies, stairways, amenities, and the surrounding yard. The idea from the HOA’s perspective is these are the areas that need to be covered and repaired in a timely manner so that the rest of the neighborhood will maintain its curb appeal to visitors and potential home-buyers. As such, the HOA fees that go to property insurance will ensure these aspects of your home are repaired efficiently.

Your responsibility

Anything inside the home is not covered by the HOA fees and its master insurance policy. As a property owner within an HOA community, you’ll still need full home insurance to ensure your belongings inside the house are covered. Check your HOA bylaws and governing documents to get an in-depth understanding of what’s included and what the exclusions are.

To find out more information about home insurance and supplementary property insurance, contact Schechner Lifson Corporation. Discover how we can make sense of the world of insurance, providing you with the best and most affordable coverage possible.