HOA Liability Insurance On The Rise: Why You Are Seeing A Jump In Your HOA Dues
Many residential communities across the nation have a Homeowner’s Association (HOA) to help them create and maintain a clean and cohesive neighborhood atmosphere. If you live in one of these communities, you may have recently seen an increase in the cost of your HOA liability insurance dues and are wondering why. It can be both confusing and frustrating for homeowners trying to understand the reasoning behind the price increase, and some may not even know exactly what their HOA liability insurance coverage is for. Here, we’ll be taking a closer look at what HOA liability insurance is and why it may be on the rise in your area.
What is HOA Liability Insurance?
Also sometimes referred to as property insurance or a “master policy,” HOA liability insurance covers physical damage to any buildings or shared spaces owned by the HOA. HOA liability insurance coverage also covers liability expenses the HOA is responsible for, like if a guest were to be injured in one of these shared spaces. HOA liability insurance coverage typically does not extend to accidental injury a guest suffers inside your home.
The money homeowners pay to their local HOA is commonly used for the upkeep and renovation of shared spaces like parks, pools, walking paths, athletic courts and fields, clubhouses, and pavilions. Assuming everyone has equal access to these common spaces and amenities, all HOA members pay an equal fee to the association. If a shared area gets damaged by a covered peril, like hail damage to the pool house’s roof or a windstorm that rips apart trees along a walking path, it’s the fees paid towards HOA liability insurance will pay for repairs to it. HOA liability insurance coverage includes all the usual perils you expect like fire, floods, hail storms, and other extreme weather conditions that can cause damage to structures.
Every member of the HOA must pay for HOA liability insurance coverage in order to live in the community, regardless of how often they use the shared space or amenities.
Why is the Cost of HOA Liability Insurance Increasing?
Considering extreme weather like hail is common in Colorado, the state typically has higher insurance costs than the national average. It may get even higher this year, as we project that HOA liability insurance is set to rise 40% in 2022. This is in part due to the damages caused by the Marshall Fire – one of Colorado’s most destructive fires in terms of property loss. The fire ravaged the town of Superior and destroyed a total of 1,084 homes in the onetime mining town and surrounding unincorporated Boulder County according, to estimates by the county. Officials estimate the tragedy caused well over $500 million in damage.
Contact CAP Management For HOA Management in Denver
During times like these, many homeowners associations will be re-evaluating how they manage their properties. If your HOA needs assistance to provide better services, solutions, and governance, reach out to CAP Management and learn how we can help make your community better. Work with us today!