Because HOA insurance is one of the best ways for your
association to limit financial risk and liability, it's generally a
good investment. For many HOAs, the governing documents
will require board members to secure some type of coverage to
protect the association and its members. HOA officers should
always review their governing documents to make sure they have
the appropriate insurance and at least the minimum coverage.
Without HOA insurance, the association may be solely
responsible for expenses related to property damage and legal
fees and settlements. This means the HOA will need to use its
own funds—working capital or reserve account—to cover these
costs, which can be substantial. If an HOA can't cover these
payments, residents may be asked to pay additional dues or a
special assessment to make up the deficit.
2. Does my HOA need
insurance?
