Homeowners associations (HOAs) have unique insurance needs. Though the property faces the same risks and perils as other properties, the parties responsible for covering the different elements of the property differ.
All individual unit possessors form the membership body of condominium, homeowners, and townhouse associations. While condominiums can be commercial or residential homes, townhouses are usually residential only. Every individual unit owner owns a particular unit, then each has a shared financial responsibility for the overall maintenance and upkeep of common areas, like clubhouse, the grounds, elevators, exterior walls, foundations, hallways, HVAC systems, outside fixtures, parking areas, recreational facilities, roofs, and swimming pools. The association's bylaws will state exactly what is owned by every individual member and what is owned by the association.
The unit owners either elect or hire association leadership to coordinate common maintenance and upkeep activities. The association's officers are responsible for hiring employees or contracting with others to provide the required services. The officers are also responsible for administrative operations and setting and enforcing rules for the association membership. The association is also responsible for the determination, collection, and disbursement of any needed assessments for maintenance, upkeep, and insurance.
For instance, each individual who lives within the community owns a portion of the building that he or she lives in. As such, residents are responsible for securing insurance coverage for their actual units; however, common areas, like swimming pools, sidewalks, garages, walkways, and other shared spaces are the responsibility of the homeowner's association. This means that the HOA is in charge of insuring these shared spaces.
If you own a community that is governed by a homeowner's association, it is vital that you understand the role of the HOA and what type of Florida HOA Insurance coverage you want to secure.
The Function of an FL Homeowner's Association
A homeowner's association is an organization within a residential community that determines and enforces rules that the property owners who live within the city must follow. The association is not only responsible for ensuring that rules are upheld, but also manages expenses for the community, makes repairs to common areas, and ensures that the property has the correct type of Florida Homeowners Association insurance coverage in the event of a loss.
The HOA also establishes regulations that are intended to govern the community. These rules also outline the Florida HOA insurance requirements, which include the particular requirements for coverage for the city, including the kinds of coverage, the coverage limits, and the deductibles, that the HOA is required to buy.
HOA insurance companies cover the shared risks of those who own units within the community. All of the buildings and the common spaces within the community are covered under a single policy, called a master policy. The rules that the association establishes and the master policy dictate which aspects of the complex the HOA insured and which parts those who own units within the community are needed to insure.
With that said, the FL HOA will ultimately determine what type and how much Florida homeowner's association insurance coverage is needed.