As a property manager or boardmember you probably have the responsibility of looking for insurance quotes every year. Without a doubt insurance is a major expense, especially for homeowners associations. That being said, going with the cheapest policy is often very tempting. Unfortunately not every policy is tailored specifically to each association. In this article we’ll go over a few points to keep in mind when shopping for an HOA insurance policy.
Sewer and drain water backup coverage. This type of coverage protects your homeowners association from damage arising out of water and sewage that can back up through your piping system overflowing your toilets and sinks. Damage to flooring, walls, and property is very costly considering it affects the unit owner and all units below and around it.
Equipment breakdown coverage, also known as boiler and machinery coverage is a very important endorsement that can easily be added into the HOA insurance policy. This type of coverage protects your association from very expensive losses with circuit panels from short-circuiting or melting down. This type of damage is usually not covered under most standard homeowners association insurance policies.
Business income coverage. This type of coverage applies to the loss of association dues and fees if units are uninhabitable due to a loss such as a fire. An entire association can take as long as a year to rebuild. Protect the association from distress resulting from lost association fees that can end up in the hundreds of thousands over the course of just a few months. Most reputable carriers can include at least 12 months worth of business income coverage.
Building ordinance coverage. This type of coverage is especially important for associations more than a few years old. City ordinance and codes change VERY OFTEN in California and this coverage pays for any upgrades the association may be required to take care of. Compliance upgrades can include fire sprinklers, fire walls, roof and ceiling updates, stair & balcony railing upgrades, and MUCH more.
These above coverage should obviously be included in your California HOA insurance policy. Unfortunately though, agents will exclude such coverage just to give you a lower premium. Call one of our agents today and have them send you multiple quotes that include these important coverage options! We look forward to hearing from you.