How Your HOA Affects Homeowners Insurance Claims

Being part of a homeowners association (HOA) has drawbacks and benefits. While you typically have to pay additional fees to have an HOA, the association will cover expenses such as repairs to your home or neighborhood. If you live in a condo or gated community, you most likely have a homeowners association. This does not, however, mean you can go without homeowners insurance. Homeowners insurance and the HOA cover different things. Understanding the relationship between the two can be important if you need to file a claim.

Homeowners Insurance vs. HOA Coverage

Most HOAs only cover certain items. They do not offer comprehensive coverage for as many events or disasters as homeowners insurance. An HOA will list the things it covers when you sign your contract to join. Typically, a homeowners association fee will cover the cost of maintaining all community or shared areas, such as a pool, park, playground, landscaping, gym or sauna. An HOA fee may also cover common utilities, such as if anything goes wrong with the water or sewage system. Finally, an HOA may charge special fees from time to time to cover major repairs, such as a new roof.

Many homeowners make the mistake of thinking they do not need homeowners insurance if they have an HOA. These are two separate parties, however, and you need protection from both. The HOA will not cover many serious and costly events, such as a robbery that deprives you of jewelry, electronics, or family heirlooms. HOAs also do not cover accidents or injuries that may occur on your property, such as medical bills if your neighbor trips and falls in your entryway. You would have to pay out of pocket to cover these expenses if you only had an HOA and not a traditional homeowners insurance plan.

What to Do When Your HOA Submits a Claim

If a disaster such as a storm or fire damages your home, file a claim with your HOA if it covers these types of events. HOAs and condo associations can typically file insurance claims regarding storms, hurricanes, water damage, broken pipes, roof damage and damage to common areas. Review your HOA rules to understand if the association will be responsible for repairs, as well as how much coverage it will provide. Follow up with the HOA regularly for updates after you submit a claim.

It is possible for an insurance company to deny your HOA’s claim. This generally happens when an event damages multiple homes or condos. If the HOA responds to your claim by saying the insurance company denied it, ask why. In some cases, an insurance company will be acting in bad faith by denying your claim without a legitimate reason. If this is the case, a bad faith insurance lawyer may be able to help you challenge the insurance company’s decision and/or file an additional lawsuit against the provider for bad faith.

Can You Receive Coverage From Both?

Sometimes, especially after catastrophic events, an HOA’s insurance policy will not have enough coverage to reimburse everyone in the community for necessary repairs. In these cases, each homeowner will be financially responsible for paying his or her portion of the remaining balance, typically charged as a one-time HOA fee assessment. It may be possible to avoid paying this amount out of pocket if you have the right type of homeowners insurance, however. Purchasing special coverage for loss assessments, for example, would mean your homeowners insurance policy would pay instead.

Finally, if an issue with your neighbor’s home causes damage to your property (such as a broken sprinkler or burst water main), you may be eligible for reimbursement through your neighbor’s homeowners insurance coverage. Filing with someone else’s insurance company could prevent your insurance premiums from increasing. It is important to file a claim with the correct party. If you need assistance with an HOA or insurance claim, turn to a homeowners insurance lawyer in Tampa for advice.