Is Homeowner's Insurance Covered Under HOA Insurance?

When you own a property in a neighborhood managed by an HOA, insurance can be a challenging topic to understand. Do you need homeowner's insurance if your HOA has a master coverage already?

What Sets HOA Insurance Differently From Homeowner Insurance?

Although they both provide protection, homeowners insurance and HOA insurance are distinct from one another. What these two insurance policies cover is the main distinction between them. While HOA insurance covers the assets and liabilities of the homeowners association, homeowner insurance typically covers the home and the homeowner's personal property.

The homeowner is responsible for paying for this insurance. You are responsible for paying for your own homeowner's insurance coverage because it protects your particular residence. The homeowners in the neighborhood contribute to the cost of the HOA insurance. The association requires homeowners to pay dues on a monthly basis. The HOA then utilizes these dues to pay the association's various expenses, which may include, among other things, insurance premiums.

What Is Covered By Homeowners Insurance?

In the event of a covered risk, homeowner insurance provides financial protection for damage to the primary residence and any personal property. The location of the residence is a critical factor in the policy and can affect the covered dangers from one provider to another. However, the majority of common homeowner's insurance policies provide coverage for the following risks:

Smoke and fire

Hail or wind storms

Frozen pipes

Falling things

Damage to the plumbing, HVAC, and appliances that result in water

Theft

Additionally, protecting against liabilities is homeowner insurance. For instance, homeowners insurance might provide coverage for claims and damages if you or a family member harm someone physically or cause property damage. Typically, earthquakes and floods are not covered by homeowners' insurance. You will normally need to acquire a different or supplementary coverage to cover those risks.

Homeowners insurance has three different levels of coverage: actual cash value (ACV), replacement cost, and guaranteed replacement cost or value. While replacement cost includes the entire cost of replacement without taking into account depreciation, actual cash value only pays you the amount after depreciation. The entire cost is also covered even if it exceeds your policy limit (often up to 20–25% over the limit), thanks to guaranteed replacement cost or value. It is, therefore, the most thorough.

What Is Covered By HOA Insurance?

HOA insurance covers shared property, in contrast to homeowners insurance, which is intended to protect a single homeowner's personal property. This policy safeguards the common facilities and structures of a homeowners association.

In a typical HOA master policy, the following things are covered:

Property harm. In the event that a covered risk damages common elements, HOA insurance may cover the cost of repairs.

Liability. The master policy may provide for the payment of medical and legal costs in the event that a visitor is hurt while on HOA property.

The hazards that are covered by HOA insurance can differ from homeowner insurance. Once more, geography can have a significant impact on what is covered.