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How often should an HOA review its insurance coverage?

Discover how often HOAs should review insurance coverage to ensure adequate protection and peace of mind for all members.

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Reviewed by:

D. Goren

Head of Content

Updated Dec, 6

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How often should an HOA review its insurance coverage?

 

How Often an HOA Should Review Its Insurance Coverage

 

An HOA should review its insurance coverage every year, and in some cases more often. A “review” means looking at whether the policy still matches the association’s property value, risks, state HOA laws, lender requirements, and governing documents. This includes property insurance, liability insurance, directors-and-officers coverage, and any special policies such as flood or earthquake insurance.

 

Why a Yearly Review Is the Standard

 

  • Property values change: Construction costs rise or fall each year. If the HOA’s coverage limit is too low, insurance may not pay enough to rebuild after a loss.
  • State laws get updated: Some states adjust minimum insurance requirements for HOAs, especially for condos and townhomes.
  • Risk conditions shift: New roofs, older plumbing, storm trends, or wildfire zones may change the amount or type of coverage needed.
  • Vendor and contractor costs rise: Inflation can make last year’s coverage inadequate for today’s claim costs.

 

When an HOA Should Review More Often

 

  • After major repairs or upgrades: Projects like roof replacement, pool installation, or clubhouse remodeling change the property value and insurance needs.
  • After a claim: A significant insurance claim can reveal coverage gaps or may cause the carrier to change terms.
  • After membership concerns: If several homeowners request proof of adequate insurance, the board should revisit the policy for accuracy and transparency.
  • During market volatility: In times of fast-rising construction costs, insurers recommend reviewing every 6 months.

 

Who Should Be Involved in the Review

 

  • Insurance broker/agent: The professional who explains policy limits, exclusions, and recommendations.
  • Board of directors: They approve coverage and ensure it matches governing documents.
  • Property manager: Helps gather data, property details, and claim history.
  • Reserve study provider (optional): They can confirm rebuild cost estimates for structural components.

 

In short, a yearly insurance review is the safest and most standard approach. More frequent reviews are smart whenever the property changes, risks shift, or the insurance market becomes unstable. This protects both the association and the homeowners’ financial interests.

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