The following information is supplied by the International Risk Management Institute and is well worth repeating.

An increasing number of homeowners are now members of homeowners' associations (HOAs). An HOA is a corporation formed by a real estate developer for the purpose of marketing, managing, and selling of homes and lots in a residential subdivision. Membership in the HOA is often a condition of sale. Since the mid-1960s, HOAs have become increasingly common. Although there are many benefits, membership does entail some added risks, particularly the exposure to paying for losses to common areas. In this case, assessments are made to each of the HOA members.

Many homeowners policies provide only limited coverage for loss assessments. If you are a member of the HOA, consider the following tips on dealing with the risk of numerous and/or expensive loss assessments.

Look into a loss assessment coverage (HO 04 35) or similar endorsement. The unendorsed Insurance Services Office, Inc., homeowners policy pays up to $1,000 for loss assessment in connection with damage to the residence premises. The loss assessment endorsement allows this amount to be increased.

Work with us or your attorney to make sure the HOA's insurance policy and limits are adequate, even if there is no or little community property. Factors to consider include: (a) the amount of coverage the association has and (b) the number of members. The higher the limits under the master policy and the larger the number of members, the better each member is protected against assessments.

Not sure what you need, give us a call and one of our associates will be happy to assist you.