Potential homebuyers typically include neighborhood and community at the top of their list for new home must-haves, and neighborhoods or community-centered properties can play a major role in bringing new neighbors and helping maintain the value of homes in the areas. However, keeping on top of all the community residents and developing a desirable neighborhood is often left to a homeowners association. Just like a business entity, there are certain liabilities and exposures that need to be addressed when operating an HOA. Having a strong community association insurance plan is one way to address the risks that are present.
Residence Coverage Options
There are different types of residences that can be included in a community association. Some of the ones generally covered through an association’s insurance plan include:
- Single-family home
- Pool house
- Association common areas
The team at U.S. Risk recommends establishing a comprehensive risk management policy in addition to purchasing comprehensive insurance. A risk management program should include identifying the four exposures to loss, evaluating the use of risk financing or control, understanding the relationships between risk financing and risk control, and evaluating how to best monitor and improve in areas of risk. Combining a risk management strategy with an insurance plan is the best way to minimize the risk of operating a community association.