Do you pay HOA fees? This added monthly bill may seem unnecessary, but it comes with several benefits, including a homeowner’s association home discount on your insurance premium.
A homeowner’s association is a group that represents the condos, townhomes, and/or single family homes in a particular neighborhood or development. All property owners are members of the HOA and are responsible for contributing a monthly fee to help pay for lawn care, snow removal, and the upkeep of other shared spaces. The HOA members also have to follow particular rules set by the group, such as painting their home using pre-approved paint colors.
If you pay an HOA fee, talk to your homeowners insurance agent about whether or not you qualify for a discount. The discount you may receive to your premium will vary based on your insurance carrier, however it can range between five and ten percent.
Insurance companies like to reward homeowners who live in neighborhoods covered by an HOA. Agents view these neighborhoods as having fewer risks because an HOA community often has a security system, neighborhood watch program, or even gates around the development. This is a deterrent to criminals and results in fewer crimes like burglary and car theft.
Another reason why insurance companies like to provide incentives to customers with a homeowner’s association discount is because homes that are part of an HOA are required to be maintained to certain standards. Just like the rules limiting paint colors, an HOA may require your roof and siding to be kept to a certain quality, your doors and windows to have specific locks, or your outside lights to be on a timer at night.
These home safety features also help to mitigate risk. If your home is up-to-date, then you are less likely to have issues during inclement weather or claim fewer losses due to property damage liability. To your insurer, the HOA saves them money in insurance claims and they want to reward you for that.
If you are not a member of an HOA, you actually still may qualify for the HOA discount. Your insurance agent will be interested to know if your surrounding neighbors belong to an HOA. Simply living near them indicates to your insurer that your neighborhood is safer. There are fewer risks posed to your home because your HOA neighbors are involved in helping to deter vandals and thieves.
There is a difference between receiving a homeowner’s association discount on your insurance and owning an HOA insurance policy. These are two different things.
Along with paying the HOA fees to help with building upkeep, property owners are also paying for HOA insurance. This is different from a standard homeowners insurance policy in that it protects against liabilities for the common areas and for damages to the outside of the building like the siding, windows, gutters, and roof. It may also cover shared appliances and equipment, outdoor furniture, and floor coverings.
This generally applies to HOA homes that are either condos or townhomes—multi-family dwellings—as opposed to single-family homes. It’s important to understand that HOA insurance does not cover the contents of your condo or townhome or protect against any personal liabilities.
Speak to an Agent
If you are thinking about moving to a neighborhood that has an HOA, or already are a member of an HOA, then speak with your independent insurance agent. They can inform you on the homeowner’s association discount available to you. Your agent can also inform you on other discounts, such as the customer loyalty discount, paid-in-full discount, and the paperless discount.
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