Homeowners Association

A homeowners association (aka HOA) is an organization of residents from a community seeking to keep common areas in order and maintain a certain quality of living.

What is a Homeowners Association (HOA)?

An HOA is made up of a group of residents who manage common areas and community property, create and enforce rules, and try to maintain a certain quality of living for the building or neighborhood.

When you purchase property within an HOA’s jurisdiction, such as a condo or a home in a gated community, you automatically become an HOA member and are required to pay HOA fees for the upkeep of common areas and/or the building.

Those dues go towards things like your elevator, trash room, reception area, guard, and anything else you share with your new neighbors.

What are some common Homeowners Association rules?

Homeowners Association rules typically cover:

  • Resident behavior (read: no late night parties, leaving the trash out, etc.)
  • How your place looks on the outside (e.g. fences higher than 8 feet are usually a no-go)
  • Common responsibilities (like paying your monthly or yearly HOA fee)

What is a Homeowners Association Master Policy?

A HOA is required by law to have a master policy, or a type of insurance policy that covers common areas shared between residents, such as a pool or clubhouse.

A master policy will most likely not cover anything inside your unit, including walls, household goods, or personal property. That’s what your condo or co-op insurance policy is for!

There are typically 3 types of HOA master policies which we’ll discuss in the following sections.

Bare walls coverage master policy

What’s covered:

Bare walls coverage is exactly what it sounds like – it’s limited to the basic structure of your building.

What’s not covered:

  • Fixtures and furnishings used by all residents of your building
  • Upgrades and improvements done by you or whoever owned the place before you
  • Your personal property (anything that can fall out of your place if it was turned upside down)
  • Stuff that wouldn’t fall out, but is for your use only (counters, cabinets, flooring, sinks, etc.)

Single entity coverage master policy

What’s covered:

Single entity coverage usually works to protect your building’s structure, common areas, and any original fixtures in individual units (legacy stuff).

What’s not covered:

Your personal property (same as above) or any improvements made by you or a previous owner.

All-in or all-inclusive coverage master policy

What’s covered:

Your building’s structure plus fixtures in individual units and any upgrades made by you or a previous owner. This type of HOA policy also includes full restoration of your unit to its condition immediately prior to a covered loss.

What’s not:

Your personal property (same as above).