HOA Insurance Information

The insurance carried by the HOA covers the replacement cost for each building. In the event of a claim, the HOA is responsible for reconstructing the exterior of the units to the studs.  The HOA is also responsible for all of the common areas.

Each of the owners in the complex should have what is referred to as an HO6 policy or a "studs in policy".  Each homeowner is responsible for the interior of their units.  This would include dry wall, paint, carpet, replacing cabinetry, fixtures, etc.  This amount will be found on their policy under dwelling coverage (or it might be called building coverage) depending on the carrier.  This should be something that is evaluated each year to make sure the number is matching market conditions.  

Other important coverages for owners to consider include:

Personal Property- This is the coverage for the contents of the home.  A good way to think of this coverage is if you turned the unit upside, down and shook it-all of the items that would fall out.  Many times this is a percentage of the dwelling amount but can also be a dollar amount.  This coverage can be Replacement Cost or Actual Cash Value.  

Loss of Use- This is an amount of money that the carrier will pay to you to help you cover the costs that are associated with you living someplace else in the event you cannot live in your property due to a loss. 

There are also many other coverages that can added such as water backup, liability, riders for jewelry and special items that are unique to needs to each owner.

For those owners that are renting their units, consider having a Landlord policy in place and considering requiring your tenants to get renters insurance.

Each homeowner should review their current coverages with their agents on a regular basis.