Insurance to cover rising HOA assessments?

Insurance
2yFollow

Insurance to cover rising HOA assessments?

James McGovern
Flipper/Rehabber · Bloomfield CT · Member since 2020 · 1k+ posts · 408 votes

I am interested in purchasing a few condos in Florida and want to understand if there are any insurance products that cover the rising cost of HOA assessments?

0Reply
27 views

Most Popular Reply

Kristine HodgesPro Member
Rental Property Investor · Broomfield CO and Estes Park, CO · Member since 2017 · 52 posts · 45 votes
1y

Agree that no insurance will cover future increases in cost of monthly or yearly HOA assessments (dues). If you're referring to a special assessment, the ones for major expenses not covered by the regular dues, then maybe. Some carriers offer loss assessment insurance, which can come into play when the HOA experiences a large covered insurance loss, such as a hail storm requiring roof replacement or a fire requiring building replacement. In those cases, if the HOA assessment is a direct result of the insured loss, it can kick in a specified amount towards the individual HOA members portion of the assessment. This is something you do on your own units policy. And not available everywhere or to everyone. You need to work with an experienced insurance broker who knows HOAs. Don't call the random agent down the street with the company that advertises on TV. Those carriers don't usually have this option. It can also be very expensive and the limits are usually low. So may not be worthwhile even if it is available. Lots of variables involved and depends on your personal situation of course. This is another example of why it's so important to have a good team of experts around you to offer options and discuss the consequences before making any decisions.

3Reply
See this reply in the discussion

3 Replies

Jump to latestLatest
  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    2y
    Quote from @James McGovern:

    I am interested in purchasing a few condos in Florida and want to understand if there are any insurance products that cover the rising cost of HOA assessments?


    Umm no. There is no insurance that covers an increase in HOA assessments.

    7e investments53 Reviews
    WebsiteView Page
    2Reply
  • Timothy W.
    Attorney · Raleigh, NC · Member since 2008 · 4k+ posts · 1k+ votes
    2y

    No and you need to put this on hold and research the condo nuke that's about to hit Florida in the form of new legislation that no longer allows condo boards to defer necessary repairs.  Condos are starting to get condemned, which means people are having to vacate units.

    I'm telling you right now, I'm a JD (not a practicing attorney) in Florida whose business is being an insurance expert for carriers, working with engineers.  I was actually on a team dispatched to investigate the Surfside Condo collapse until the clean up process basically rendered our investigation moot.  Condos were built by a lot of cheap scumbags who are long gone and people are going to be left holding the bag on these.

    This guy is pretty good at explaining it:  

    Yak Motley Florida Condos

    ;t=4s

    1Reply
  • Kristine HodgesPro Member
    Rental Property Investor · Broomfield CO and Estes Park, CO · Member since 2017 · 52 posts · 45 votes
    1y

    Agree that no insurance will cover future increases in cost of monthly or yearly HOA assessments (dues). If you're referring to a special assessment, the ones for major expenses not covered by the regular dues, then maybe. Some carriers offer loss assessment insurance, which can come into play when the HOA experiences a large covered insurance loss, such as a hail storm requiring roof replacement or a fire requiring building replacement. In those cases, if the HOA assessment is a direct result of the insured loss, it can kick in a specified amount towards the individual HOA members portion of the assessment. This is something you do on your own units policy. And not available everywhere or to everyone. You need to work with an experienced insurance broker who knows HOAs. Don't call the random agent down the street with the company that advertises on TV. Those carriers don't usually have this option. It can also be very expensive and the limits are usually low. So may not be worthwhile even if it is available. Lots of variables involved and depends on your personal situation of course. This is another example of why it's so important to have a good team of experts around you to offer options and discuss the consequences before making any decisions.

    3Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free