By Community Association Specialist, Trey Griffy
Living in a community association, whether its a condominium, townhome or a single-family homeowners association (HOA), brings a sense of belong and shared responsibility. One of the most crucial aspects of community living is insurance. In the state of Minnesota, understand the components and intricacies of community association insurance is critical for every resident. Let's delve into the basics to help you make informed decisions about protecting your home and community.
Master Policy
The cornerstone of community association insurance is the master policy. This policy typically covers the common areas and shared structures within the community, such as swimming pools, clubhouses, and landscaping. It acts as a safeguard for property damage and liability claims arising from accidents in these communal spaces.
Building Coverage
Under the master policy, building coverage protects the structure of your dwelling. This typically includes, but is not limited to walls, floors, ceilings, and built-in appliances. In the case of a fire, vandalism or weather-related claims, building coverage ensures that the repair costs are covered, easing the financial burden on individual homeowners. The elements covered by the master policy vary by association and are dependent on the verbaige found in your governing documents. So be sure that you and your person insurance agent have a clear understanding of what is and is not your personal responsibility for insuring.
Liability Insurance
Liability coverage is a crucial component of community association insurance, shielding residents from legal and medical expenses in the event someone is injured within the community. Whether its a slip and fall incident or a pet-related injury, liability insurance provides a safety net for the association and its members.
Personal Property Coverage
While the master policy covers common areas and building structures, it does not extend to personal belongings insides individual units. Residents should obtain personal property coverage on their HO-6 policy to protect their furniture, electronics, and other possessions. This ensures financial support in case of theft, fire, or other covered events.
Loss Assessment Coverage
In some situations, the association may levy special assessments to cover losses not fully covered by the master policy. Most often in Minnesota, we see this is in the case of large hail related claims. Loss assessment coverage is critical in these scenarios, helping homeowners manage their share of unexpected expenses without breaking the bank.
Weather- Related Risks
Minnesota's climate poses unique challenges, including harsh winters and the risk of severe storms in the warmer months. It's crucial to ensure that the community association insurance includes coverage for weather-related risks such as ice dams, frozen pipes. and wind damage. Understanding the specific weather-related risks in Minnesota helps tailor insurance coverage to the community's needs.
State Laws and Regulations
Minnesota has specific laws and regulations governing community associations insurance. Familiarize yourself with these to ensure compliance and make informed decisions. For example, certain master policy coverages may be mandatory, and failure to comply could result in legal consequences for the association.
Board of Directors' Role
The board of directors plays a pivotal role in managing community association insurance. They are responsible for selecting appropriate coverage, obtaining quotes, and ensuring that the association's insurance meets legal requirements. As a resident, it's essential to stay informed about the decisions made by the board and actively participate in discussions related to insurance matters.
Navigating the intricacies of community association insurance in Minnesota requires a combination of awareness, involvement, and understanding. By educating oneself on the types of coverage available, considering Minnesota-specific risks, and staying informed about state laws, residents can contribute to a safer and more secure community. As you explore insurance options, remember that communication and collaboration within the community are key to ensuring everyone's well-being. With the right insurance coverage in place, you can enjoy the benefits of community living while safeguarding your home and investments.
If your community is interested in exploring insurance options, Nesbit Agencies would love to help. With a 50-year history, and a growing portfolio of more than 200 community associations in Minnesota, we stand ready to serve your community.
Trey Griffy
Community Association Specialist
Nesbit Agencies, Insurance Services
(952)746-4302