Homeowners associations (HOAs) are a staple in residential areas and function as a means to promote community cohesion. As a natural extension of this goal, HOAs often purchase insurance policies to cover injuries that occur on shared property and cover property damage that occurs to common spaces. While helpful, the nature of these policies can make it difficult to determine what an HOA insurance policy covers when an incident occurs. This is especially true for HOA insurance policies purchased to cover condos, as this style of home consists of many shared spaces. Further, HOA insurance policies are often long, intimidating documents overflowing with technical terminology and fine print. These features combined often make understanding an HOA insurance policy feel impossible.
So what does HOA insurance cover, exactly? Below our attorneys tackle this and other common questions about HOA insurance policies, as well as tips for communicating with homeowners when a claim or dispute arises.
Understanding HOA Insurance for Condos
It’s a common requirement in most states that condo associations purchase commercial property insurance. Typically, a condo association insurance policy covers the overall structure of the building and the building’s common areas, such as stairwells and sidewalks. Some policies may cover individual units, but this varies depending on the policy and applicable state laws.
As a general rule, liability coverage is a common feature of an HOA condo insurance policy. This feature typically covers personal injuries that occur in the building’s shared areas. Likewise, property coverage is a part of a condo insurance policy that protects property found in common spaces from perils such as fire, natural disasters, or vandalism. Further, damage that occurs to a unit’s ceiling, floor, or shared walls may be covered by the condo association insurance policy under certain circumstances.
What Are HOAs Responsible for Fixing?
HOA insurance policies differ depending on the language of the policy, as well as the state laws that the HOA must follow. However, as a general guide, HOA property damage claims are likely valid if they pertain to shared areas. Likewise, HOA insurance claims that deal with personal injury may also be valid if the injury occurred in these shared spaces as well. For each type of claim, common spaces may include areas such as:
- Foyers
- Offices
- Stairwells
- Elevators
- Parks or shared outdoor spaces
- Playgrounds
- Gyms or recreational facilities
- Sidewalks
- Private roads
- Unit ceilings, floors, and walls (in the event of a structural issue)
What Are Homeowners Responsible for Fixing?
While there are some edge cases to keep in mind, generally, the HOA isn’t responsible for property damage or personal injury that occurs within a unit or individual home. Further, the surface of the walls, furnishings, fixtures, appliances, furniture, modifications, and ventilation systems are typically the responsibility of the homeowners. At the same time, injuries sustained within units or homes aren’t usually covered by the HOA.
There are a few exceptions to this general rule. If the HOA is directly involved in the damage of an individual unit or home or in causing an injury, it may be held fully or partially liable.
Steps HOAs Take Before Contacting the Insurance Provider
Unfortunately, insurance companies are quick to deny HOA insurance claims. This means that valid claims often slip through the cracks. In order to combat this, consider taking the following steps before approaching the HOA insurance provider with a claim:
- Review your bylaws to determine whether the damage or injury is clearly covered
- Collect information on where and when the event occurred
- Document the event with witness statements and photographs
- Detail your claim thoroughly and in accordance with your bylaws and insurance policy as best you can
Steps HOAs Take After Contacting the Insurance Company
Once you are ready to file a claim, follow through on this process by taking the following steps:
- Contact your insurance provider in a timely manner
- Don’t rely on your insurance agent to give notice of your claim; ensure that the agency formally received your claim
- Make sure you have the funds to cover the deductible, if applicable
- Address time-sensitive or dangerous damage and keep the receipts for reimbursement later
- Notify your homeowners of the claim, what it covers, and what it doesn’t cover
Best Practices for Communicating With Homeowners
It’s a good idea to update the homeowners in your building or association as often as necessary to keep them up to speed on what is happening with their homes. If the residential area suffered significant damage, tensions are likely to be high. Communicating often and thoroughly is key to mitigating lingering doubts or frustrations.
Once you receive an approval on the HOA insurance claim, notify the homeowners about what this claim entails. It’s essential that they understand what their responsibilities are, since property damage can be shared in certain situations. In the event of a natural disaster, such as a hurricane, that causes damage to common areas, it’s likely the HOA policy will cover those damages. On the other hand, storm damage within a home or unit isn’t likely covered. For this reason, it’s a smart plan to notify your homeowners of their responsibilities immediately, as they may need to file their own claims.
When to Contact a Lawyer
Involving an attorney may be a good idea at any stage in the process. An experienced property attorney can help compile thorough documentation of an event, prepare the claim according to the HOA insurance policy, and litigate the claim if the insurance provider denies it.
Have Questions About HOA Insurance Claims? Contact GED Lawyers Today
If your HOA or condo association has further questions or is seeking legal guidance on commercial property insurance, contact GED Lawyers today. Our dedicated team of attorneys and paralegals offer a proprietary system that allows clients to track the status of cases with full transparency. We also have extensive experience litigating claims on behalf of HOAs and will fight for your claim. Visit us online to learn more about our practice areas or to book your free initial consultation.
