Should I Get Homeowners Insurance If I Pay for HOA Fees? – Article by Mary Schultz, eHow Contributor


When you pay homeowner’s association, or HOA, fees, a portion of those funds goes toward insurance for the entire building and grounds. Before closing, when you purchased your condo, the HOA probably provided you and your lender with a copy of their insurance. By reviewing the policy terms, conditions, limitations and exclusions, you can determine your needs for additional coverage to round out your insurance protection. Condo owners may need insurance similar to renter’s insurance.

Contents in Your Condo

As a condo owner, you have coverage against perils, such as fire, that could damage or destroy the dwelling. However, you probably also have personal possessions in your condo. Depending on the policy your HOA has, in the event of fire, the policy might or might not adequately cover losses like damage and destruction to inside walls, systems and major appliances. If the limits of the HOA coverage leave you vulnerable, you may need some homeowners insurance to cover the interior of your condo. If the only coverage you lack is for your personal belongings, you can purchase contents insurance. In the event of theft, fire or other covered peril, having coverage for your condo contents could be invaluable.

Risks of Liability

The HOA coverage almost certainly provides liability insurance for the condo complex. What it may not cover is the interior, decks and even walkways of your condo. If a guest slips and falls inside your unit, or tumbles over your balcony, you could conceivably have personal liability. Similarly, if you have a pet and the pet injured a passerby, the liability could be yours. By having insurance against liability, you are insured against potentially devastating financial loss.

Additional Expenses of Living

If a fire or other covered peril makes your condo uninhabitable, the HOA coverage is in place to get the building restored to its former condition. But where do you go the interim? Insurance plans are available to help you pay for the costs of living if your condo cannot be lived in. Some of these not only provide for a hotel room or temporary rental, but also for meals and transportation. This coverage for additional living expenses is often known as loss of use insurance. It usually has strict limits in duration and amount, but it can be very helpful to a condo owner who is displaced for a time.

Ways to Save on Condo Insurance

If you have insurance for an automobile, you may be able to purchase insurance for your condo at a discount. When you bundle insurance in this manner, the insurer may be willing to pass some savings along to you. As with many kinds of homeowners insurance, insurers sometimes provide discounts for other reasons. Those eligible for discounts include college students, military or government personnel, or those in teaching and engineering. It does not hurt to ask if such discounts are available. Some insurance companies reward customers who install certain safety features in their condos with discounts. These might include a fire extinguisher, deadbolt door locks and alarm systems.

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