Insurance Requirements Every HOA Should Know
Introduction
Insurance is one of the most important responsibilities of any HOA, co-op, or condo board. The right coverage protects not only the property but also the board members and residents from financial harm. Yet many communities misunderstand what coverage is required or allow policies to lapse without proper review. At Jonasvar, we work closely with insurance professionals to ensure our communities are properly protected.
The Core Insurance Policies Every HOA Needs
At minimum, every community should carry the following insurance policies:
General liability: Protects the association against accidents and injuries on the property
Property insurance: Covers damage to common elements such as roofs, lobbies, and amenities
Directors and Officers (D&O): Protects board members from claims related to their governance decisions
Umbrella coverage: Provides additional protection beyond standard limits
Fidelity bond: Protects against theft or fraud by those handling association funds, including the management company
Cyber coverage: Protects against data breaches, email scams, and digital threats
Terrorism coverage: Provides protection for catastrophic events in high-density or high-profile locations
Coverage Gaps Boards Often Miss
One of the most overlooked policies is the fidelity bond. Without it, communities may be left exposed if funds are stolen or mismanaged. We also see boards neglect to update coverage amounts as property values rise, leaving insurance limits far below actual replacement costs.
Why Proper Coverage Matters
Inadequate insurance leaves communities vulnerable to lawsuits, special assessments, and financial instability. A single uncovered claim can cost millions of dollars, putting enormous strain on residents and reducing property values. For example, a liability claim without proper coverage can directly impact the building’s bottom line, forcing owners to pay out of pocket.
Jonasvar’s Approach
At Jonasvar, we review each community’s coverage annually with their insurance broker. We ensure policies are current, limits are appropriate, and endorsements are in place, such as naming the association and management company as additional insureds and verifying workers compensation coverage. We also request competitive quotes so communities can compare pricing while maintaining the required protections.
Where Others Fall Short
Too many boards and managers take a “set it and forget it” approach to insurance, renewing policies year after year without review. Others fail to track expiration dates, leading to lapses in coverage. Jonasvar avoids these gaps by partnering with experienced insurance brokers and maintaining tracking systems for each policy, ensuring coverage never lapses and limits are always up to date.
Real-World Value
We have helped communities avoid major financial losses simply by making sure their coverage was complete. By verifying fidelity bonds and updating policy limits, we have protected associations from potential fraud and ensured replacement costs were adequately covered. These proactive reviews often mean the difference between a manageable claim and a devastating financial hit to residents.
The Jonasvar Difference
Insurance is not just paperwork. It is the foundation of community protection. Jonasvar’s proactive reviews, partnerships with brokers, and strict tracking systems give boards peace of mind knowing that their residents and assets are fully protected.
The Bottom Line
Insurance requirements are complex, but the cost of being underinsured is always greater than the cost of coverage.
Let Us Help
At Jonasvar Inc., we manage your property like it’s our own by partnering with trusted brokers, verifying coverage, and protecting your community from the unexpected.
Wondering if your HOA has the right coverage in place?