/hoa-insurance-faq

Does HOA insurance include fidelity or crime coverage?

Discover if HOA insurance covers fidelity or crime protection. Learn essential details about your HOA's insurance policy.

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Reviewed by:

D. Goren

Head of Content

Updated Dec, 6

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Does HOA insurance include fidelity or crime coverage?

 

Does HOA Insurance Include Fidelity or Crime Coverage?

 

Most HOA master insurance policies can include fidelity or crime coverage, but it is not always automatic. Whether it is included depends on the type of policy the board purchased and what state law or governing documents require.

Fidelity coverage (also called employee dishonesty coverage) protects the HOA if someone with access to funds steals money. This can be a board member, management company employee, or anyone handling bank accounts, fees, or reserves.

Crime coverage is a broader category. It can include theft of cash, fraud, forgery, and computer‑related theft. Fidelity coverage is usually one part inside a larger crime policy.

 

Is This Coverage Required?

 

This depends on:

  • State law: Several states require HOAs to carry fidelity insurance. For example, California, Florida, and Colorado set minimum amounts. These amounts usually equal the total of all reserve funds plus a percentage of operating funds.
  • Governing documents: Many CC&Rs or bylaws require the HOA to maintain fidelity coverage, often naming specific dollar amounts.
  • Lender requirements: If your community ever seeks FHA or VA approval, those programs require strong fidelity coverage.

When these rules apply, the board must buy the required policy. Homeowners do not pay separately; the cost is folded into HOA dues.

 

How Do You Know if Your HOA Has It?

 

  • Ask for the insurance declaration page — a summary sheet showing every type of coverage and limits.
  • Look specifically for wording such as “fidelity bond,” “employee dishonesty,” or “crime policy.”
  • If it is missing, the board or manager can ask the insurance agent for a quote; adding it is normally inexpensive.

 

Why This Coverage Matters

 

  • Protects reserve funds: Reserves for roof, paving, or structural work are often the largest pool of money the HOA holds.
  • Prevents special assessments: Without this coverage, stolen funds usually must be replaced by homeowners.
  • Covers management companies: Most policies can extend coverage to outside managers who handle finances.

In most cases, a well‑run HOA either already carries fidelity or crime insurance or can add it easily. If you are unsure, reviewing the policy documents will give you a clear answer.

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