What's the Right Insurance Policy for my Homeowners Association

Insurance is generally the largest budgeted expense for most homeowners associations (HOAs). But not every insurance policy is the same. So how do HOAs know whether the insurance policy they've purchased meets their needs? These are just some of the things HOAs need to be consider when they're deciding which insurance policy to purchase.

What is the Policy Deductible?

Every property insurance policy will have a deductible. But not every insurance policy has the same kind of deductible for every kind of claim. The two main kinds of deductibles HOAs regularly see are flat deductibles and percentage deductibles.

Home ownership grows for community associations

In the United States, community associations represent the fastest-growing form of home ownership. These organizations include townhome associations, condominium associations and cooperatives. According to a 2010 estimate from the Community Associations Institute, there were 62 million Americans living in community associations. That's about 25 million homes. There are law firms that serve the legal needs of these associations, including their boards of directors and property management companies.

It's the legal responsibility of community associations to protect the investments that their members have made in the neighborhood. They do this by passing and enforcing a wide range of rules regarding homes and common areas. They also may be responsible for the maintenance and repairs of community assets and resolving disputes between members. In order to fund these actions, they will usually collect fees from members. Most of the time, the associations will be able to handle these activities independently.


After you've made a claim, the insurance company's adjuster will inspect your home for damage and prepare an estimate. When you receive the insurance company's estimate, you see that it lists two amounts for "RCV" and "ACV." How much money do you have to make repairs?

What insurance policies generally do and do not cover

When natural disasters strike, they may cause various forms of damage to homes and apartments. Items inside of a home or apartment may also be damaged or lost in the aftermath of a storm. A standard homeowners or renters insurance policy in the U.S. will likely cover the cost of repairing a home. It will also likely help individuals pay to repair or replace belongings damaged inside of the home, apartment or condo.

Of course, there are exceptions to what a homeowners or similar insurance policy will cover. For example, one may not help to pay for damages that were caused by a flood or earthquake. Traditional homeowners policies are also unlikely to pay for damages caused by mudslides or other disasters involving moving ground. However, it's possible to purchase flood or mudslide insurance policies, and it may be necessary to buy coverage for both a home and the possessions inside of it.

Tips for making storm damage insurance claims

The U.S. has been hit by an unusual number of severe thunderstorms this summer. For example, on Aug. 11, a hailstorm tore through Billings, Montana, shattering windows and punching holes in roofs. This sort of damage can cost hundreds or even thousands of dollars to repair, forcing many homeowners to file an insurance claim to recover their losses. Fortunately, there are several things they can do to make the claims process go more smoothly.

According to experts, the first thing homeowners should do is remain calm and avoid making costly mistakes, such as failing to get a full assessment of their property damage or paying a random contractor to make quick repairs. Instead, it is better for homeowners to take their time and ask their insurance agent plenty of questions before making any big decisions. Second, it's important for homeowners to take pictures of all property damage before starting to clean up or make any repairs. Next, they should cover any broken windows or holes in the roof to prevent more damage from the elements.

Get help with insurance claims and maintenance after a storm

It was a beautiful, sunny day, but you noticed that clouds were starting to form. Just a few hours later, the sky was dark and the winds were picking up. Hail fell, heavy winds tore through the neighborhood and your properties were left damaged. Fortunately, they were still standing.

As a property manager, you know how quickly a storm can damage many homes. Now, you're left with the task of having your insurance provider cover the cost of fixing these properties.


Realtors and other real estate professionals play an important role in assisting buyers and sellers in transactions involving homeowners associations ("HOAs"). Smith Jadin Johnson is here to help professionals ensure that their clients have all of the information they need to make an educated decision about their particular situation, and to make sure their transaction goes as smoothly as possible.

Texas is top state for hail damage insurance claims

Texas leads the nation in hail damage insurance claims, according to an analysis released by the National Insurance Crime Bureau (NICB). The analysis looked at claims data from Jan. 1, 2016 through Dec. 31, 2018.

According to the analysis, there were almost 2.9 million hail loss claims filed within the study period. Of those, 811,000 were filed by property owners in Texas, making it the top state for claims of that type. In addition, San Antonio and Plano placed first and fifth on the list of top five cities for hail loss claims, with 75,000 and 43,000 claims, respectively. Meanwhile, Colorado was the second leading state for hail claims, with 395,000. Nebraska, Missouri and Kansas rounded out the top five, with 163,000, 153,000 and 146,000 claims, respectively.

Association Insurance Deductibles

Insurance claims can create financial burdens for homeowner association who have to pay often-substantial deductibles under their master insurance policies. While every insurance policy is different, many HOA insurance policies now have separate deductibles for wind and hail claims that can be as much as 1%, 2%, or even 5% of the total insured value of the property. For example, a condominium building valued at $15,000,000 with a 2% deductible for wind and hail claims would have a $300,000 deductible for insurance claims involving wind or hail damage. Most associations cannot easily cover this deductible.

Colorado hailstorms cause insurance costs to spike

Colorado homeowners may be concerned about their insurance premiums, especially as hailstorms are causing even more damage throughout the state. In 2018, Colorado suffered the greatest hail losses across the country.

This devastation exceeded Texas, which is the state with the second-largest amount of hail damage according to a report from the State Farm insurance company. The Rocky Mountain Insurance Information Association said that insurance companies in the state paid out a substantial amount in damages due to hail.

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