Obviously “best” is relative to your specific association since no two are exactly the same. What would you consider the “best” coverage”? Homeowner associations all over California pay a pretty penny to keep the association protected if something were to go wrong. Wouldn’t you agree that the best insurance coverage is the type of coverage that comes in and takes care of you when you needed it the most? Of course you would! In this post we’ll go over a few very important coverages that are often overlooked due to “the lowest price wins” mentality.
Now obviously no one wants to overpay for insurance and we’re not insinuating that you do, especially when policy premiums can range from $30,000-$100,000. Ultimately you want a policy that takes care of you when something happens. Sewer water backup coverage, ordinance or law coverage, and actual cash value vs guaranteed replacement cost are just a few aspects of the policy that need to be considered when shopping for HOA insurance.
Sewer water backup coverage protects the HOA from sewage that could easily come up through the sinks and toilets. This type of loss happens very often, especially when work is being done to sewage lines in the area. thousands of gallons of sewage waste can easily cause millions of dollars of damage, especially in multi story associations where one unit can cause damage to those around and below it.
Ordinance or law coverage provides financial help to associations that were built before new city codes and ordinances were put into place. Codes for fire sprinklers, windows, roofing, framing, etc. are constantly evolving to make our associations an even safer place to live. Unfortunately these required upgrades are not covered under a standard homeowners association insurance policy. The ordinance or law coverage endorsement needs to be added to the policy for this type of protection to kick in. Associations built before the year 2000 could have hundreds of thousands of dollars worth of required building code upgrades.
When shopping for an HOA insurance policy you may be presented with two different types of property coverage: actual cash value (this is the replacement cost minus depreciation), and guaranteed replacement cost (this type of policy will guarantee to rebuild your association no matter what the cost). In the event of a disaster the cost of construction and contractors can significantly rise due to supply and demand. The cost to rebuild your association could be hundreds of thousands of dollars above the agreed value. Guaranteed replacement cost is always the best option.
Get in touch with one of our California homeowners association insurance brokers. We have access to multiple carriers that offer quality policies containing the above coverage and much more. You can call us, e-mail us, or just fill out the form to the right.