Insuring Home and Community: Why HOA Insurance Matters


Whether you’re a homeowner, a prospective buyer or simply curious about how HOAs and association management protect your community, we’d like to offer you a comprehensive understanding of HOA insurance. Before looking at the world of HOA insurance, let’s start with the basics: 

A Homeowners’ Association (HOA) is formed by a community of homeowners in a particular residential development or neighborhood. An HOA’s primary purpose is to manage and govern the shared common areas and amenities of the community, like parks, swimming pools and clubhouses. 

HOAs establish rules and regulations to maintain a certain quality of life in the community and ensure common areas are well-maintained. And that’s where HOA insurance comes in.

Understanding HOA Insurance

In the past, we’ve established the basics of what HOA insurance coverage is available. Let’s take a closer look at the risks of not having this protection and why your community should always make coverage a priority.

Not carrying proper HOA insurance can expose the association and homeowners to major financial risks. One major exposure is property damage to common areas or structures owned by the HOA. This could include damage to amenities like pools, clubhouses, or playgrounds. Without insurance, the HOA would have to pay costly repairs and rebuilding using homeowner dues or special assessments. 

Another risk is liability claims. If someone is injured in a common area and sues the HOA, liability coverage helps pay for their damages. Without it, the HOA could face lawsuits and legal judgments worth hundreds of thousands of dollars or more. 

This could lead to bankruptcy or the need for repeated special assessments on homeowners.

An HOA should also insure key personnel against theft and fraud. Without this, a dishonest board member or property manager could embezzle funds without recourse. 

Insuring against cyber risks is also crucial these days. A data breach could expose homeowners’ personal information. HOA insurance provides protection in these scenarios.

Not carrying tailored HOA insurance coverage leaves the association and homeowners vulnerable to major losses ranging from property damage to liability lawsuits. It only takes one uncovered incident to financially devastate an HOA. 

Benefits of HOA Insurance

Now that we’ve explored the risks of not having HOA insurance let’s take a closer look at the benefits it offers to the community and individual homeowners.


HOA insurance spreads the financial risk across all homeowners within the community. This cost-sharing mechanism ensures that no single member is unfairly burdened with the expenses of repairing or replacing common areas.

Legal Protection

Liability coverage protects both the HOA and its members from potential lawsuits, which could otherwise lead to financial hardship for the association or its homeowners.

Peace of Mind

Knowing the community is adequately insured can provide homeowners with peace of mind, allowing them to focus on enjoying their homes and the amenities the HOA provides.

Attracting Buyers

A well-insured community is more attractive to potential buyers, which can help maintain property values and make it easier to sell within the community.

Maintenance and Repairs

HOA insurance ensures that common areas are promptly repaired or replaced in the event of damage, helping to preserve the overall aesthetics and functionality of the community.

Let Goodwin and Company Guide You Through

Whether you’re a homeowner or a prospective buyer, being aware of your HOA’s insurance coverage is crucial to responsible homeownership. Knowledge is power, and the realm of HOA insurance is no different. 

HOA insurance plays a vital role in safeguarding both the community’s collective interests and homeowners’ individual investments. It provides peace of mind and financial protection and ensures the shared spaces and amenities we value are well-maintained. Reach out to Goodwin & Company for all your questions about HOAs, community services and more!