One major responsibility in running a homeowners association is acquiring the necessary insurance policies for your community. Because there are a lot of options, choosing the right policies can be overwhelming. Following these tips can help you relieve some stress and make informed decisions.
#1 Know Your State and Local Requirements
Know matter where your association is located, your state and local governments will have regulations on what kinds of insurance policies an HOA must carry—and, in many cases, requirements on coverage limits and addendums in relation to the size of your community and the value of its assets.
#2 Check Your Governing Documents
Your association has several documents that dictate how it should be run. When selecting insurance policies for your HOA, be sure to read through these documents. They may include coverage requirements, deductible minimums, or even companies you must avoid due to conflicts of interest among the board, owners, or directors.
#3 Document All Additions and Improvements
Your insurance policies and coverage are often based on your association’s value, including the value of its assets. When you make additions to your community, whether that be new amenities or improvements to existing structures, you increase the value of your neighborhood. When you’re considering policies to keep, acquire, or change, you should have an accurate assessment of existing or added value.
#4 Research Insurance Types
There are many different kinds of policies you can acquire for your HOA, and you should be informed on them whether your community currently needs them or not.
#5 Don’t Wait Until the Last Minute
You don’t want to wait until the day before your policy expires to research new ones. You should start requesting and comparing quotes at least 90 days early. This will give you time to properly decide what policies and premiums are right for your association.
#6 Plan Ahead to Cover Premiums
Paying coverage premiums for HOAs is no small task. It can take a large sum of money just to initiate a policy. You should work with your board members and owners to properly budget for these expenses ahead of time.
Tackling the world of insurance for HOAs can be daunting, but you don’t have to stress. Contact us and we’d love to talk about how we can help.