What Is HOA Insurance and When Is It Required?

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Homeowners association (HOA) insurance is a type of commercial insurance policy that covers property owned by an HOA and shields leaders, volunteers and other members from lawsuits in situations where the HOA is found liable for a person’s injury or damage to their property.

HOAs may be required to maintain a minimum amount of insurance depending on where they are located. As a member of an HOA, you are not personally responsible for purchasing coverage but some of the money you pay in HOA fees will go toward covering the HOA’s insurance premium.

Keep reading to learn more about how HOA insurance works and what additional coverage types HOA members need to buy to fully protect their own homes and belongings.

Key Takeaways

  • HOA insurance provides coverage for common areas maintained by the HOA and protects volunteer leaders from personal liability claims, among other things.
  • Every member of the HOA will contribute to the HOA insurance premium by paying their regular dues and may have to pay extra fees to cover the deductible anytime the HOA has to file an insurance claim.
  • The HOA insurance policy will never cover your belongings and won’t cover your home if you live in a neighborhood with unconnected houses, so you will still need to purchase a homeowners or condo insurance policy for yourself.
  • HOA insurance costs $57 to $79 per month on average, while HOA members pay $191 per month in regular fees on average.
  • Loss assessment coverage is an optional add-on for home and condo insurance policies that can cover your share of the HOA insurance deductible or your share of the excess costs for a claim that exceeds the master policy’s coverage limits.

What Is an HOA?

A homeowners association (HOA) or condo association is an organization consisting of the residents of a certain neighborhood or condo. Depending on the state it is in, an HOA may be required to register as a nonprofit corporation.[1] HOAs are typically run by a board of directors made up of volunteers who live in the community and are members of the HOA themselves.

If you move into an area that is governed by an HOA, you will generally have to join the HOA and pay monthly dues to cover the services it provides. These services can include setting up community-wide security systems, managing common areas like swimming pools or tennis courts and more. The HOA board may also enforce certain regulations such as what color you can paint your house and how often you must mow your lawn.

What Is HOA Insurance?

HOA insurance is a type of commercial insurance that generally insures common areas and other HOA-owned property against covered perils and provides liability coverage in case someone is injured or their property is damaged while they are on HOA-owned property. In addition, HOA insurance can cover legal expenses if an HOA member is sued for decisions they made or actions they took in their capacity as a director, officer, trustee, employee or volunteer.[2]

If you live in a condo, your condo association’s master insurance policy should cover shared spaces within the building as well as the external structure of your unit such as walls, floors and ceilings.

It may also cover built-in fixtures and appliances inside of your unit like kitchen cabinets and washer dryers, although this isn’t always the case. As a result, you may need to purchase separate condo insurance to cover the interior structure of your unit.[3]

Meanwhile, if you live in an HOA-governed neighborhood with unconnected houses, your HOA’s insurance won’t provide any coverage for your home like a standard home insurance policy would. Nevertheless, HOA insurance can still protect you indirectly since any costs the HOA incurs will ultimately fall to its members in the form of special assessments, which are extra fees your HOA may charge in addition to your regular dues in certain situations.

How Does HOA Insurance Work?

If you are a member of an HOA without any sort of leadership position, you don’t have to purchase HOA coverage yourself. Instead, you will contribute your share of the insurance premium by paying your regular HOA fees. It is the responsibility of the board to deliver the premium payments to the insurance company and file insurance claims if necessary.

There are numerous coverage types that could be included in an HOA or condo association insurance policy including the following:[4][5]

How Much Does HOA Insurance Cost?

If you manage the finances for an HOA, you should plan on setting aside at least $57 to $79 per month to pay for the HOA’s general liability insurance.[6] Meanwhile, rank-and-file HOA members can do their part to secure coverage by simply paying their monthly HOA fees. The average HOA fee throughout the United States was around $191 per month in 2021.[7]

What Are the HOA Insurance Requirements Where I Live?

HOA insurance requirements vary from state to state. For example, for individual HOA members in California to avoid being held personally liable for HOA-related bodily injury or property damage claims, the HOA must maintain at least $2 million or $3 million in general liability insurance depending on the number of HOA members. The HOA must also maintain at least $500,000 or $1 million in D&O liability insurance for volunteer directors and officers to avoid personal liability.[8]

Who Pays HOA Insurance Deductibles?

Oftentimes, HOA members will each pay a portion of the HOA insurance deductible, which is the minimum amount of money the HOA must contribute out of pocket toward every claim. The deductible may be evenly split among members through special assessments or the HOA could cover it using money that members have already paid in regular dues. In some cases, a single member could be responsible for covering the entire deductible if they were solely at fault for a covered accident or the only one impacted by a covered peril.

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Why Should You Get HOA Insurance?

HOA insurance coverage is crucial if you are in charge of running an HOA because it enables you to protect yourself and other members from bearing the full financial burden of a costly liability lawsuit. In addition, HOA property coverage ensures that damaged common areas can be repaired in an efficient manner.

Meanwhile, individual HOA members may want to add loss assessment coverage to their condo or homeowners insurance policies. This coverage type can take care of your share of the HOA insurance deductible or a special assessment you have to pay after a claim exceeds the master policy’s coverage limits.

How To Get HOA Insurance

It’s recommended that condo or homeowners associations shopping for the right policy compare quotes from three to five insurance companies. Each insurer may request information such as the location of your HOA and the amount of money you bring in through regular HOA fees. Naturally, contacting multiple insurance carriers individually can be a drawn-out and tedious process.

Fortunately, you can streamline this process by using an insurance marketplace such as SmartFinancial. Our questionnaire can quickly collect information about your coverage needs and budget and then match you up with agents who can offer you some of the best policies available to you. Type your zip code below to start the process of obtaining free commercial insurance quotes today.

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What’s the difference between HOA and condo insurance?

Condo insurance covers the internal structure of your unit and your personal property, while the condo’s HOA insurance covers communal spaces, the external structure of your unit and potentially some built-in fixtures inside of your unit.[3]

What’s the difference between HOA and homeowners insurance?

Homeowners insurance covers your home and belongings and protects you from personal liability, while HOA insurance covers HOA-owned property and protects board members and other volunteers from personal liability.

Is insurance included in HOA fees?

The amount you have to pay in monthly HOA fees will likely include your share of the premium for the HOA master insurance policy.

Do HOA fees cover homeowners insurance?

HOA fees do not cover home insurance, so you will need to buy your own homeowners insurance policy separately. Keep in mind that many HOAs require you to maintain home insurance and you may be eligible for a discount since HOA-governed communities are often gated or have extra security, which lowers the risk that you will need to file a homeowners insurance claim related to theft or vandalism.


  1. Clark Simson Miller. “These Federal Laws Regulate HOA Communities.” Accessed Nov. 21, 2023.
  2. Travelers Insurance. “Community Homeowners Association (HOA) Insurance.” Accessed Nov. 21, 2023.
  3. Insurance Information Institute. “Insuring a Co-Op or Condo.” Accessed Nov. 21, 2023.
  4. Farmers Insurance. “Homeowners Association Insurance.” Accessed Nov. 21, 2023.
  5. State Farm. “Condominium and Homeowners Association (HOA) Insurance.” Accessed Nov. 21, 2023.
  6. HOA Management. “HOA Insurance 101: Why Does Your HOA Need It?” Accessed Nov. 21, 2023.
  7. United States Census Bureau. “American Housing Survey (AHS) Table Creator.” Accessed Nov. 21, 2023.
  8. California Legislative Information. “Civil Code Division 4. General Provisions, Part 5. Common Interest Developments, Chapter 9. Insurance and Liability.” Accessed Nov. 21, 2023.

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