Lauren Lewthwaite Last Updated On: October 10, 2023

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What Is HOA Insurance & Do You Need It? Find Out Here

HOA Insurance

Homeowners associations offer many perks, but many people might be surprised to see that it costs money to have access to these perks. Part of those costs are often HOA insurance, which benefits you in the long run—even though it might be painful to pay into it. 

So, what exactly is HOA insurance and what do you get from it? Keep reading, and we’ll explore all of that and more. 

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What Is an HOA?

HOA stands for homeowner’s association, which is a group that provides certain services to home and condo owners in an area and sets rules and regulations that owners have to follow.

For example, if you live in a condo, you might have access to a pool, BBQ, gym, rooftop, etc. You’ll also notice that landscaping around the condo is covered, as is shoveling, cleaning of shared spaces, and more.

A homeowner’s association helps pay for and maintain these services and shared spaces. Otherwise, you and the other owners would be cleaning the pool, cutting grass, scrubbing the gym, and more! No thank you, are we right?

An HOA comes with many benefits, but unfortunately, it isn’t free. You pay dues or fees that go into maintaining the community, and part of that is HOA insurance. 

More on that next. 

HOA Insurance Explained

If you’re thinking HOA insurance and condo/homeowners insurance are the same, boy do we have news for you. Living in a shared community comes with many perks (hello, never having to shovel again!) but it also has its fair share of risks.  If a guest slips and injures themself at the pool, or a storm floods the gym, who pays for it? You guessed it: HOA insurance. HOA insurance has two buckets of coverage:
  • Liability: This helps pay for damages if someone is injured in a common area and the HOA is found liable. 
  • Property Damage: This covers damage to the condo building and shared spaces from a covered peril, like fire, a break in, or wind damage. 
It’s pretty important to note, HOA insurance doesn’t cover your actual condo interior, any of your belongings, or your personal liability within your condo. HOA insurance is purchased by the homeowners’ association and members pay into it, but it doesn’t protect beyond shared spaces. You should have separate condo or homeowners insurance to better protect your own space.

How HOA Insurance Works

Your HOA purchases an insurance policy and each member pays equal portions of the premiums. And if you’re thinking that you shouldn’t have to pay as much because you didn’t use the parking garage or gym at all this year, think again: each member has equal access to the shared spaces and services, so they have to pay equal fees (even if they don’t use them). 

Bummer. And we have more not-so-great news for you. HOA insurance often has coverage limits, meaning that the insurance will only cover up to set dollar amounts in a claim. That means that if a storm caused $100,000 in damage to the condo building but insurance only covers $75,000, members are on the hook for the remaining $25,000 (to be split equally). 

This is where loss assessment coverage comes in. More on that next.

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What Is Loss Assessment Coverage?

There’s insurance for almost anything these days. But loss assessment coverage is a good thing. It can be added to your personal home or condo insurance and it helps cover any leftover costs that HOA insurance doesn’t cover. 

That means that if a claim exceeds the HOA insurance policy limits and members are required to foot the remaining bill, your loss assessment coverage would kick in and cover that remaining amount. 

Loss assessment coverage is typically included in condo insurance but can also be added to homeowners insurance if desired.

How Much Is HOA Insurance?

Cost is usually first on everyone’s mind, but with HOA insurance, there’s no easy answer to how much it costs. This is because it depends on a wide range of factors, like where you live, the size of the building, the various amenities that might affect the building’s risk to insurers (eg. pool, rooftop deck, gym), and the actual policy that the homeowner’s association chooses.

Of course, the number of people living there also greatly impacts the cost; more people means more risk but also more people to split the fees with. 

HOA insurance costs are usually bundled into your HOA fees, which include upkeep and maintenance of the property. HOA fees can range from $100 to $1,000 per month. It’s always a good idea to inquire about HOA fees before moving in so that you can budget accordingly, but keep in mind these fees can change over time. 

Tip: Living in a building with a homeowners association can be a sweet deal as you get older. After all, you don’t have to worry about property upkeep and get access to great perks to keep you healthy, like a gym and pool. Budgeting for HOA fees is a smart idea as you get closer to retirement. Find more tips and helpful advice like this in our free retirement guide

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Condo Insurance vs. HOA Insurance

If you have HOA insurance, do you still need condo insurance? Yes!

HOA insurance protects the building and shared spaces, but it usually doesn’t cover your individual condo and your belongings within it. It also doesn’t cover your personal liability for anything that happens inside your condo. 

There are some variations of condo association insurance policies that offer more coverage. Here’s how they work:

  • Bare walls-in coverage: This means the policy covers just the structure of the condo building, so everything behind the walls like the studs, drywall, and insulation.
  • Walls-in coverage: This includes the above but also covers the interior structure of the unit, including flooring, cabinets, and bathroom fixtures.
  • All-in coverage: This includes all of the above but also includes built-in appliances and often improvements or alterations you make to the unit. 

Even if your building association has all-in coverage, you’re not fully protected. It helps to know exactly what condo insurance does cover, so you can decide if it’s worth having on top of HOA insurance.

Condo insurance covers these six buckets:

  • Dwelling: The structure of the unit is covered from damage, including any upgrades you have made. 
  • Personal Property: Your belongings are covered from damage, including your jewelry, electronics, furniture, and more.
  • Loss of Use: If your unit is damaged and needs to be repaired, this covers lodging and food while that happens. 
  • Loss Assessment: If your HOA insurance doesn’t fully cover a claim, this covers your out-of-pocket portion. 
  • Liability: If someone is injured in your condo or your renovations cause damage to other units, this helps cover your personal liability, including medical costs and legal fees. 
  • Medical Payments: If someone is injured in your condo, this covers their medical bills, even if you’re not at fault. 

As you can see, condo insurance offers robust coverage that protects you in ways you might not even have thought of. It can give condo owners peace of mind and financial protection. 

Condo insurance doesn’t replace HOA insurance, or vice versa. They work in tandem to give you the most protection possible as a condo owner. Plus, condo insurance is probably more affordable than you might think. Get access to free quotes here to find out.  

Does HOA Cover Home Insurance?

If you live in a home that’s part of a homeowners’ insurance, you will still probably pay for HOA insurance. But you will also want to have separate homeowners insurance, because like in a condo, HOA insurance doesn’t cover your belongings or liability inside your home. 

Plus, unlike in a condo, HOA insurance for houses also doesn’t cover the outside structure of your home. Read more on how important dwelling coverage is here.

It’s a great idea to have either home or condo insurance in place, regardless of whether or not you pay into HOA insurance.

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HOA Insurance Key Takeaways

Your home is your sanctuary, and protecting that sanctuary is important. HOA insurance might not be optional, but it is there to protect you and your financial interests. Supplementing HOA insurance with separate home or condo insurance is also a good idea, because it offers even more protection for you than HOA insurance does. 

Ready to explore your home and condo insurance options? Click here for access to free quotes and more. 

When it matters, we’ve got you covered.

Lauren Lewthwaite Lauren Lewthwaite has been freelance writing for almost five years writing content that ranges from health to insurance and everything in between. Lauren is also a trained translator in French and English and is a dog-mom to an adorable Australian Shepherd.

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