In a world of what-ifs and unknowns, insurance coverage is a must. While many homeowners associations choose to forego coverage in an effort to save money, doing so leaves board members and owners on the hook for damages and lawsuits. If you aren’t sure whether your LA HOA Insurance policy gives you the necessary protections and coverage limits you need, consult with your trusted Scott Litman Insurance professional today. In this article, we will discuss how to get the most coverage for your money without compromising your peace of mind.
First, here are the required coverages:
- Fire Insurance – This coverage is required to cover the full insurable replacement value of all improvements and repairs covered by the HOA.
- Public Liability Insurance – Covers injury to third parties such as slips and falls.
- Building Ordinance or Law – Covers building code upgrades, undamaged buildings, and demolition.
- Fidelity – This may or may not be required. This protects the HOA from embezzlement by directors and officers, managers, or volunteers.
- Workers’ Comp – Required if your HOA has employees.
How can I reduce these expenses?
With all of these coverages, you might be thinking, “How can my HOA afford that?” However, there are ways to reduce your premiums without compromising on coverage. First, you can increase your deductibles. Oftentimes, raising the deductible from $1,000 to $5,000 significantly reduces your monthly payment (up to 10%). Especially if your HOA doesn’t have a lengthy list of claims, this is an easy way to cut costs from your monthly budget.
Next, you can consider eliminating “Unit” coverage. This means that each home or condo owner would be financially responsible for claims that arise from inside the unit. This encompasses water damage from busted sink pipes, fire claims, etc. However, removing this coverage cannot interfere with the existing CC&R’s. If you change the “Unit” coverage, the CC&R’s would have to be updated, as well. Not only would this have a short-term effect on the monthly budget, but this would also minimize losses and claim activity in the long run!
Lastly, there are some subjective discounts that insurance carriers can offer your HOA, if applicable.
Premises – If your HOA offers housekeeping services, has ample lighting, and traffic control, your HOA might be subject to some discounts.
Management – Implementation of safety practices and prevention methods within your HOA.
Protection – Security, watchmen, security cameras, and maintenance of protection systems can qualify you for discounts.
Employees – Low turnover, best practices for hiring, and effective training methods.
If you’re unsure what coverages you need, or you need your current policy examined, contact our experts today. We are the HOA experts in Los Angeles and Ventura counties, let us go to work for you.
About Scott Litman Insurance Agency
At Scott Litman Insurance Agency, we are dedicated to protecting HOAs like yours. We have a unique understanding of the industry and the common risk exposures that you face in your daily operations. In fact, we find that 90% of the policies we review are missing coverages that violate the Covenants, Conditions, and Restrictions (CC&R), exposing the board, HOA and management to lawsuits– which is why our comprehensive policies are tailored to meet your specific needs at competitive prices. For more information about our products, contact our experts today at (855) 999-4505, or fill out our online form.