Homeowners Association Insurance in North Carolina
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Homeowners Association Insurance in North Carolina
What is a homeowners association insurance?
Homeowners are generally responsible for insuring their individual houses, but insuring any common areas in a neighborhood often falls to the homeowners association. HOAs in North Carolina could be sued if someone is injured in a common neighborhood area, and they also might have to replace equipment if it’s significantly damaged. Homeowners association insurance may help cover such potential expenses.
Homeowners association insurance gives specialized coverages for HOAs. An HOA master policy may protect associations from certain risks, and individual homeowners from associated special assessments.
Which homeowners associations in North Carolina need HOA insurance?
Most homeowners associations in North Carolina should carry HOA insurance. A major claim could burn through reserve funds if coverage isn’t in place, and still have additional costs.
In many cases, coverage isn’t just recommended but can be required per HOA bylaws.
What areas in a neighborhood can HOA insurance cover?
HOA insurance is usually able to cover the areas that a homeowners association is responsible for. Depending on an association’s specific needs, these might include:
- Hardscaping: Walkways, fences, lighting, gazebos, retaining walls, etc.
- Landscaping: Trees, gardens with poisonous plants, ponds, etc.
- Amenities: Playgrounds, pools, community buildings, etc.
Most other features and areas can also be covered with the right policy. HOA board members should speak with an agent specializing in HOA master policies if they have unique features to insure.
What protections does HOA insurance provide for covered areas?
For covered features and spaces, an HOA policy usually provides two primary protections:
- Property Coverage: May cover damage to or destruction of physical features, ranging from lights to pools. Usually will pay to repair or replace features if there’s a covered event.
- Liability Coverage: May cover injuries and other accidents that occur in a common area. These could include people tripping and falling, children falling out of trees, and pets eating poisonous plants. Usually will pay attorney fees, court fees, and a settlement.
- Commercial Umbrella Coverage: May cover especially expensive lawsuits that exceed the limits of primary liability coverage.
Other coverages are available if necessary. A knowledgeable agent can review all coverage options with an HOA board.
Do HOA policies cover sidewalks in a neighborhood?
Most HOA policies certainly are able to cover sidewalks or other walkways in a neighborhood. Whether walkways are actually covered by a policy may depend on who’s responsible for the sidewalks, though.
A policy might not need to cover sidewalks if they’re the responsibility of the local municipality. A policy probably does need to cover sidewalks if they’re the responsibility of the homeowners association.
Can claim costs still be passed onto individual homeowners if an HOA has insurance?
If a homeowners association were to face an enormous claim, it’s technically possible that some costs would have to be passed onto individual homeowners through a special assessment. This would be a truly tragic accident, however, as the associated lawsuit would have to be extremely expensive.
With reserve funds, liability coverage, and commercial umbrella coverage, it’s highly unlikely that a covered lawsuit’s costs would require a special assessment. Umbrella coverage, in particular, can often provide multiple millions in protection. An experienced insurance agent can advise HOA boards as to how much liability and commercial umbrella coverage they should choose.
Who pays for an HOA’s insurance policy?
The premiums for an HOA policy are typically paid by the homeowners association. The costs are normally passed onto individual homeowners as part of their monthly payments or annual assessments, though.
To help keep costs affordable, HOA boards can work with an independent insurance agent who knows these policies. An independent agent will be able to cheek quotes from several insurance companies, comparing both coverages and premiums.
Where can HOAs in North Carolina get homeowners association insurance?
If you’re on an HOA board, contact the independent insurance agents at Laurie Insurance Group. Our North Carolina agents will work closely with you to determine coverage needs, and then we’ll find a homeowners association insurance policy that meets your association’s needs well.
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