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Homeowners’ Associations (HOA) are corporations formed to maintain the wellbeing and security of communities (condo/townhouses). Where HOAs are concerned, there are few regulations and no general insurance programs.  Understanding the coverage provided by your HOA will enable you to make smart decisions. To avoid the unexpected, make sure you have insurance coverage that is best suited for your situation.

The Basics

Homeowners’ Associations must carry General Property and Liability Insurance for the community, but these policies do not cover everything. As a corporate entity, HOAs have employees—including management companies that take care of the properties—and just like a regular business; they need to have the same type of insurance.

Take the time to go over the HOA’s coverage for your community to identify any weak areas, and take the steps to strengthen coverage. 

What Did They Miss?

Think about every official action and function your HOA takes and fulfills; nearly all of these interactions can be a source of liability for the community.


Comprehensive Equipment Coverage – Designed to provide coverage for damages or loss caused by sudden mechanical breakdown (e.g. a water heater leaking and causing water damage.) Typically used to expand property insurance, it can be purchased for either groups of machines or specific units.

Workers’ Compensation – Review Workers’ Comp, even if the association doesn’t think it has any true employees, because any worker may try to claim an HOA as an employer.

Employee Dishonesty – Protects the community from several kinds of theft, fraud and embezzlement carried out by HOA employees or officers.

Discrimination Coverage – In the event of a foreclosure, this coverage helps protect HOAs from evicted parties claiming they are being discriminated against because of class.

Comprehensive General Liability – HOAs may be protected in community-owned areas by their required liability plan, but a comprehensive policy can grant liability coverage to any location where an association function or meeting is being held.

Director’s and Officer’s Liability – Covers an HOA if it is sued for misappropriated funds or officer negligence.

Even the best HOA can’t protect against everything. Community members should know what the HOA protects so they can make sure their own property has insurance against all types of loss. 

An agent who understands your community is crucial to getting excellent coverage. Call The SIG Insurance Agencies and discuss any changes to your community or concerns you may have about your HOA’s coverage. Working together, we can discover the exact insurance your association needs to protect the assets of your living community.