Whether a new HOA board has recently taken over or the current one is reassessing its budget, the issue of insurance costs often takes center stage when it comes to evaluating HOA fees. As insurance is a major part of any HOA budget, managing to successfully reduce costs without compromising on coverage should be a primary concern for any homeowners association.
What should trigger a conversation about evaluating your current policy?
As the insurance landscape has undergone significant changes in recent years, and as the circumstances of any HOA evolve over time, it's imperative to periodically reassess the adequacy and effectiveness of the insurance coverage in place. If one or more of the following applies, obtaining another quote for your insurance policy is a good idea.
The policy is up for renewal
When nearing the renewal period, it presents an opportune time to review your current coverage, assess any changes in the community's needs or assets, and explore potential adjustments or alternatives to ensure comprehensive protection.
Your premium increased +10% upon renewal
A sudden increase in premium rates can be a red flag indicating changes in risk assessment or market conditions. If your HOA recently filed a claim, or made any major upgrades to the property such as installing a swimming pool, the increased rate may be justified. Nevertheless, it's crucial to investigate the reasons behind the rate hike and evaluate whether your current policy still offers the best value for the coverage provided. Additionally, exploring alternative insurance options may help mitigate the financial impact of premium increases.
You’ve been with your current insurance company for 2+ years
Staying with the same insurance company for an extended period may lead to complacency. While loyalty is commendable, it's essential to periodically review your coverage to ensure it still meets your needs. Over time, your community's requirements may change, and there may be new insurance products or providers in the market offering better terms or coverage options.
There were major renovations or upgrades to the property
Significant renovations or upgrades can affect the property's replacement cost and risk profile. It's essential to update your insurer whenever major renovations are made so that your insurance coverage will reflect these changes accurately. Failure to do so may even result in inadequate coverage in a loss.
New board/president in place
Changes in leadership within the homeowners association can bring fresh perspectives and priorities. A new board or president may have different risk management strategies or preferences regarding insurance coverage. It's always a good idea for the new leadership to thoroughly review the existing insurance policy to ensure it aligns with their vision for the community and adequately protects its interests.
Your carrier got acquired at any point while you’ve had coverage
Corporate mergers and acquisitions can impact the terms and conditions of insurance policies. Following an acquisition, the acquiring company may change coverage options, premiums, or customer service practices.
What to look for in an HOA insurance policy?
Not all insurance policies are created equal. To make sure you’re getting a good deal while covering all your bases, pay extra attention to:
- Policy limits and deductibles: Understand the maximum amount the policy will pay out for covered losses and the amount you're responsible for paying before the insurance coverage kicks in.
- Coverage options: Review the types of coverage offered and what’s included, such as
- Property coverage: replacement cost vs actual cash value
- Liability coverage: general vs. personal liability
- Covered vs. excluded perils, such as wind and hail, fire, vandalism, etc.
- Policy endorsements and additional coverages: HOAs are strongly recommended to have directors and officers coverages. Other additional coverages include hired and non-owned auto, ordinance or law ABC, employee dishonesty, and more
How do you get another HOA insurance quote?
Obtaining insurance quotes independently has become increasingly accessible and common in recent years. With tech-forward insurers like Honeycomb, lengthy applications that can only be understood by savvy insurance professionals are a thing of the past. Submitting a quote takes less than 5 minutes, and you get an immediate response to whether the quote can be bound.
- Visit honeycombinsurance.com! Specialized in real estate insurance, HOA Presidents have praised Honeycomb’s “easy, consumer-accessible feel - simply log on, submit the application, and get a quote in minutes”.
- Send us your current policy, and at no cost, a licensed professional will provide a quote and analysis of the differences in policies, as well as opportunities to save money or enhance coverage while minimizing potential risks
- Most HOA boards and presidents may not be familiar with complex insurance terminology, but with Honeycomb, that's not a concern. Our team of professionals is ready to answer any questions and assist you in completing your application
