A properly insured HOA is a protected HOA, but even the best insurance policy has gaps in coverage, which is why we encourage you to talk to your agent about an umbrella policy. If you’re not familiar with umbrella policies, don’t worry. Today we’ve highlighted five of the most important reasons your HOA should consider adding this coverage to your insurance plan:

  1. It bridges the gap between your HOA’s Directors and Officers Liability coverage and your general liability coverage.
  2. An umbrella policy is one of the most cost effective, budget-friendly ways to provide your HOA with higher limits.
  3. Typically umbrella policies have to “drop down” to replace underlying insurance coverage when the aggregate limits are exhausted.
  4. An umbrella policy offers broader coverage than just an excess liability policy.
  5. Since an umbrella policy covers a much higher limit with broader coverage, your community is better protected from tragic accidents where the HOA may be held responsible for damages or bodily injuries.

No matter how well managed and insured you think your HOA is, talk with an agent to assess your risk. You’d be surprised by how little it takes for something disastrous to happen and the HOA to be held liable. By talking with an agent who specializes in planned communities, you’ll be better able to assess risk and get the coverage you need to protect your community’s assets. Pairing good coverage and an umbrella policy with proactive risk management is the best way to protect your community’s assets during an unplanned natural disaster or tragedy.

Related: Insuring Your Community