What Is Homeowners Association Insurance And Do I Need it?

Do you currently belong to a homeowner’s association? You are probably already paying for at least one policy without realizing it. You pay membership dues that distribute to either community insurance or master policy. A master policy is when you pay dues on either a home or condo, usually in the form of liability protection. Some of you might pay separate insurance on your condo or home which works as a supplemental policy.

Your homeowners insurance dues pay for services rendered through the community (usually a member-elected board). Say, for example, you violate your HOA. That means you could be subjected to fines and other penalties, including being banned from using certain facilities.

The money you pay every month goes to everything from community resources to funding the community master plan, including video surveillance.

How Does The Master Plan Work?

Your money goes to everything from the funding of community services, including gym memberships to the pool, to providing coverage for the loss of property, in the case of a natural disaster.

Every member pays an equal amount every month. Think of it as liability insurance for the community. You can choose to pay for the master plan. The master plan affords every community member (whether it is a community of houses or condos) the same rights and privileges.

What happens if you own a condo within the complex?

In most cases, the HOA board suggests you acquire supplemental insurance for your condo, which is in addition to the dues you pay toward the master policy.

What Does The HOA Master Policy Cover?

1) There are liability expenses that the HOA board has to cover every year. Think of your payments as reimbursements for the expenses the board covers.

2) Your dues also go to protecting your community (be it home or condo) against something from happening. Now, some argue, “what happens if you pay dues on the policy but never use it”?

“It is better to have it and not need, then, need it and not have it”.

What we do want to note is what the policies will not cover. The policies are not going to cover a guest if he or she gets injured on your property. Your insurance will not cover if your guest is injured away from home. You need to consider those two situations and possibly get some additional coverage in the case that happens.

Your master policy might only cover a limited amount of insurance concerning accidents in the communal areas. You will need additional coverage when the master plan is finished. To speak with someone about homeowner’s insurance today, contact us at 772-287-3625

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