Congratulations! You just purchased your first home that is located in a neighborhood with a Homeowners Association, aka an HOA. While this means that somebody else may be mowing the lawn and maintaining the pool house, what does it do to your home insurance premiums?
Protecting the Property that You Own
Home insurance policies created for single-family houses generally include coverage for your sheds, pools, and even your landscaping. This is in addition to protecting the actual house structure and all your personal possessions. It will also include liability insurance in case somebody gets hurt after slipping on your front step.
Your insurance for a townhouse or separate dwelling inside an HOA will be limited to just the physical structure that you own per the sales contract. If you share walls, a basement, or a roof with your neighbor, that part of the structure will not be included in your separate policy. Some HOAs even stipulate that you only own the interior walls of a home.
The HOA Carries Separate Insurance for Shared Spaces and Liability
If your HOA keeps a tool shed where they store lawnmowers, that building will be covered by their own commercial property insurance. They also carry a policy for liability in case anybody is injured on the shared playground, sidewalks, or the street. If you see your HOA maintain a part of the property, you can assume that the HOA also insures it. Part of your monthly HOA fee will go toward paying the HOA insurance premium.
Who Do You Call to File a Claim?
If a tree came down in the yard in front of your unit, does that fall under your home insurance or the HOA policy? Your best bet is to place a call to both companies. If it is a clear answer, both agencies will tell you which one will handle the rest of the claim process. If it is a shared claim, you will have your insurance company providing professional intervention, saving you some stress and frustration.
Reviewing Your Boundaries with Your Agent and Lender
It can be tempting to simply sign the dotted line to transfer your home insurance from one property to the next. However, if you are moving from private property to an HOA, you will want to spend some time reviewing your boundaries before agreeing to any policy. Both the writer for your mortgage and the person completing the details on the policy must fully understand exactly what parts of the new home are shared and what are your responsibility. Just agreeing to whatever is suggested could cost you big in premiums or an unpaid claim should something go wrong.
If you would like more information about your home insurance and how it works with your HOA, give your agent at Atlanta Insurance a call today!