What You Need To Know About HOAs And Home Insurance
If you don't want the added hassle of maintaining your landscaping or you want access to private amenities like a pool and workout facility, then investing in a home that belongs to an HOA can be a great solution. HOAs are a cooperative of homeowners that work together to maintain a certain standard of living within their community.
While there are many benefits associated with belonging to an HOA, these associations can make it tricky to ensure that you have the right home insurance in place for your property. Here are two things that you need to know in order to obtain proper coverage for your HOA-included home in the future.
1. Know what the HOA's insurance policy covers.
It's important that you take the time to review your HOA's insurance policy to determine where their coverage ends.
If you have a detached home, the HOA may only be responsible for insuring the common areas within the community (like a park or playground, swimming pool, or golf course). This means that you will need to have a traditional home insurance policy in place to cover any damages sustained by your home.
If you live in a condo, the HOA likely covers repairs that need to be made to the exterior of the building. You will be responsible for covering anything from the studs inward—including drywall, cabinetry, flooring, and your personal property.
2. Know the coverage limits for your HOA's insurance policy.
Since insurance coverage is based on the ever-changing replacement value of a given property, it's possible that your HOA's insurance policy doesn't provide adequate coverage for damages that may be sustained to your home.
The board in charge of your HOA should be constantly reviewing policy coverage limits and updating them as needed to provide maximum protection, but you need to ensure that your own home insurance policy will protect you from costly out-of-pocket overages.
Talk to your insurance agent about adding loss assessment coverage to your policy. This type of coverage will help pay the difference between your HOA's coverage and the actual cost of repairs should your HOA find itself underinsured in the future.
Navigating the home insurance process when you belong to an HOA can present some unique challenges. By taking the time to become familiar with the areas that your HOA's policy covers and the coverage limits outlined in your HOA's policy, you will be able to invest in personal home insurance that is best equipped to protect your financial stability in the event of an accident.
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