Small, Medium & Large HOA Insurance

Small, Medium & Large HOAs

Does size matter when it comes to HOA Insurance? Each size HOA has its own “personality” that deserves special attention. Therefore, having the right agent can make all the difference between hearing… You’re Covered… or… Not! Size does matter… and here’s why…

First – Consider the size difference between Small, Medium and Large HOAs:

Small Homeowner Associations have 2 to 25 units.
Small Homeowner Associations are usually Self-Managed Homeowner Associations.
Medium-Size Homeowner Associations have 26 to 99 units.
Large-Size Homeowner Associations have 100 or more units.

Small HOA Profile
Most small HOAs with less than 25 units are self-managed.
Most small HOAs don’t have swimming pools or other recreational facilities.
Most small HOAs have a small common area.
Most small HOAs have three (3) Directors and Officers.

Medium HOA Profile
Medium-size HOAs with 26 to 99 units are almost always professionally managed.
Medium-size HOAs typically have one swimming pool and one pool shower building.
Medium-size HOAs may have one small common area meeting room.
Medium-size HOAs typically have three (3) to five (5) Directors and Officers.

Large HOA Profile
Large-size HOAs with 100 or more units may have a professional on-site manager.
Large-size HOAs may have two or more swimming pools.
Large-size HOAs frequently have additional recreational facilities including Jacuzzis, saunas,
exercise equipment, jogging trails, tennis and volleyball courts or even golf courses.
Large-size HOAs may have multiple clubhouse buildings with meeting rooms
including kitchens that are rented out for parties or other events.
Large-size HOAs frequently have five (5) to seven (7) Directors and Officers.

Then consider… Doesn’t each size HOA deserve customized coverage based on the following considerations?

Considerations for Small HOAs
Are You a Board Member at a Small HOA? Are Your Personal Assets Exposed?
The Davis Agency is frequently hired to conduct HOA insurance evaluations. It is not unusual to find small HOAs whose insurance coverage violates the Davis-Stirling Act Civil Code, potentially exposing personal assets of the Board Members when a loss occurs. In addition, we frequently find small associations carrying HOA insurance that is out of compliance with their CC&Rs. These situations are fraught with danger. Being out of compliance or underinsured also exposes Board Members and the HOA to lawsuits.

Is Your Small HOA Self-Managed?
Small Homeowner associations are defined as associations with fewer than 25 units. Small homeowner associations are frequently self-managed. Self-managed homeowner associations do not benefit from guidance provided by professional managers who may have taken educational classes and be experienced with HOA insurance. Statistics show that small self-managed HOAs are at high risk of lawsuits, particularly against the Board Members.

Are There Gaps in Your HOA Insurance Coverage?
Because small associations are typically under economic pressure to keep HOA Dues low these self-managed associations are susceptible to agents who low-ball their quotes by cutting coverage. Well-intentioned board members then vote for the cheapest price, but don’t realize they now have huge gaps in their coverage.

Is Your Small Association Benefiting from an HOA Insurance Specialist?
If you had a tumor and required surgery, would you demand a seasoned neurologist… or would you use a general practitioner Using an insurance generalist to provide technical commercial HOA insurance can lead to financial suicide for your HOA. The huge majority of agents in the marketplace are not well versed in HOA insurance. Any agent can click buttons on a company website to create a quote, but very few are trained to understand this technical coverage or how missing endorsements can affect your protection.

Considerations for Medium HOAs
Medium-size HOAs containing 26 to 99 units are typically professionally managed. However, medium-size HOAs toward the smaller end of this scale are sometimes assigned community managers who are new to the business so are eager to learn, but may not have gained much insurance knowledge yet. In addition, the Board Members at medium HOAs are frequently so busy resolving agenda items that it is easy to simply “roll-over” and renew the existing HOA insurance policy. If your agent is not reading each renewal policy they may not be aware that the Company downgraded your renewal coverage. Therefore, having a fully-trained HOA insurance specialist handle your account is a wise choice. After all, shouldn’t a professional-grade agent audit and update your coverage and provide on-going counsel as well as good advice to your HOA Board Members and Community Manager?

Considerations for Large HOAs
Large-size HOAs containing 100 or more units are professionally managed and may have so much activity that a Professional Manager is assigned to an on-site office. The on-site manager may coordinate use of common-area recreational facilities such as meeting rooms, clubhouse rentals and exercise programs. Large HOAs may have so much common area that security guards are hired to patrol the grounds. Parking control and towing are also frequently an issue at large HOAs. This type of heavy activity deserves special attention by your insurance agent. Your insurance professional should also insure the inventory of Business Personal Property including contents of the on-site office, common-area furniture, maintenance tools, gym equipment, clubhouse furnishings and common area artwork.

Why take a chance? Request a free no-obligation HOA insurance evaluation.
Call or email us today. Phone 877-600-3199 or info@dandavisins.com