Types Of Insurance Through The Homeowner's Association

Homeowners association insurance provides for protection against any liability incurred by the homeowners association (HOA). An HOA is a non-profit group, create by real estate developers in order to develop, sell and manage a housing development. Homeowners who purchase an HOA home purchases homeowner’s insurance from a licensed insurance company, not the HOA.

HOA Liability Insurance

HOAs may charge an assessment of the HOA homeowners in order to pay for the liability insurance. This assessment is part of the fees and other assessments that an HOA may be permitted to levy. The liability insurance is a protection for the management of the HOA and does not cover the individual homeowners. Liabilities that may arise from risks that occur on a homeowner’s property is covered under the individual homeowner’s policy.

HOAs Need for Licensing to Sell Insurance

HOAs have been in existence since the mid 196os and provide a way for like minded homeowners to organize and enforce their standards of living. If an HOA were to offer individual homeowner insurance policies to its homeowner, it can only be accomplished through organization as an insurance company or agency and licensed with the commissioner of insurance in the respective state of the HOA.