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  • Writer's pictureAGM Real Estate Group

AGM'S GUIDE TO HOA INSURANCE



HOA CERTIFICATE OF INSURANCE


The Certificate of Insurance is not an insurance policy itself, but rather verifies and summarizes the coverage provided by an existing policy. In the context of an HOA, a Certificate of Insurance is typically issued by the association's insurance provider to verify that the association has an active insurance policy in place and to provide details about that policy, such as the policy limits and coverage types. It is important to note that a Certificate of Insurance does not guarantee coverage or confirm the adequacy of the policy; it simply provides evidence that the policy exists and outlines its key features.


The Certificate of Insurance may be requested by third parties, such as lenders, contractors, or vendors, to confirm that the association has appropriate insurance coverage. For example, a lender may require a Certificate of Insurance before providing a mortgage to a homeowner in the association, or a contractor may request a Certificate of Insurance before performing work on the association's common areas.



HOA INSURANCE | HO6

POLICY ENGAGEMENT Vs. ENGAGEMENT OF HOMEOWNER


The specific circumstances under which the insurance policy of the HOA engages instead of individual homeowner HO6 insurance policy will depend on the governing documents of the HOA and the specific insurance policies in place as well as determination of the cause of the repair or damage.


In general, the HOA's insurance policy may provide coverage for losses that occur in common areas or that affect multiple units, such as damage to the roof or exterior walls of the building. Individual HO6 policy, on the other hand, typically provides coverage for losses that occur within the individual unit or that are caused by the homeowner or its guests.


If a loss occurs in a common area or affects multiple units, the HOA may file a claim under its insurance policy to cover the cost of repairs or replacement refer to the governing documents if homeowner is responsible for the deductible or a prorate share of the HOA’s policy deductible. If a loss occurs within your individual unit or is caused by the homeowner or its guests, a claim should be filed under the individual HO6 policy.


It is important to review the governing documents of your HOA and your individual insurance policy carefully to understand the specific terms and conditions of coverage. If you have any questions about the extent of your coverage or how to file a claim, you should consult with your insurance agent or a qualified attorney.



HOW TO SUBMIT FOR AN HO6 INSURANCE CLAIM

Insurance claims are the responsibility of the individual homeowner. If retained at an additional hourly cost, the management company may provide assistance to navigate the claim process. To submit an HO6 insurance claim, review the following as a guide:

Review your HO6 insurance policy to understand what is and is not covered by your policy.


Contact your insurance company as soon as possible to report the claim. Be prepared to provide the following information:

  1. Your policy number

  2. The date of loss

  3. A description of the damage or loss

  4. Any photos or other evidence of the damage or loss

Cooperate fully with your insurance company's investigation of the claim. This may include allowing an adjuster to inspect the damage or providing additional information as requested.

Keep detailed records of all communications with your insurance company, including the names of any representatives you speak with, the date and time of the communication, and a summary of what was discussed.

If the damage or loss is impacts or is related to a common area or caused by another homeowner, or the tenant occupying your unit, notify the HOA and provide them with a copy of your claim.


It is important to keep in mind that the HO6 policy only covers losses that are specifically covered by the policy, and there may be limitations or exclusions that apply.


DETERMINING HO6 INSURANCE POLICY COVERAGE

Long Term | Short Term Rental Business in My Unit


The association’s governing documents may have a rental cap (see Rental Cap section) in place limiting the number of rental units allowed at any given time. Approval from the board prior to renting a unit may be subject to the terms and conditions of the governing documents, and a wait list may need to be observed. Refer to the governing documents to confirm any amendments to the rental cap policy, or potential exceptions.


Review the terms of your HO6 insurance policy to determine whether your long-term or short-term rental business is covered. Typically, standard HO6 policies are designed to provide coverage for a homeowner's personal property and liability within a condominium or townhome that is occupied by the owner or a tenant on a long-term basis.


If you are renting out your unit on a short-term basis, such as through Airbnb or another vacation rental platform, you may need to obtain additional coverage to protect your business activities. Some insurance companies offer specialized policies that are specifically designed for short-term rentals, while others may offer endorsements or add-ons to a standard HO6 policy.


It is important to discuss your rental business activities with your insurance agent to ensure that you have the appropriate coverage in place. Failure to disclose your business activities could result in a claim being denied in the event of a loss.


For more information on HOA Committees or community association management please contact AGM Real Estate Group


AGM REAL ESTATE GROUP

Community Association Management | Bellevue, Washington

206.622.8600


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