Did you know: Homeowner's Associations (HOA) need insurance for all common areas shared within the development?

Get The Right HOA Cover. Call Misha.

When it comes to common property insurance, the HOA must make sure that all areas, physical buildings and structures open for communal use by the members living within the HOA, are insured against damage and public liability.

Each of the individually owned properties within the HOA, however, must be insured by the homeowners at their own expense.

It’s also in the HOAs interest to have insurance to protect the estate from potential lawsuits that might arise from accidents or problems occurring on the HOA’s property, for example, if someone were to injure themselves while on the property. 

If the injured person was to sue the HOA for damages, and there is no insurance in place, it would become the responsibility of the members of the HOA to cover the costs.

It’s, therefore, imperative that they have sufficient insurance to cover all legal costs and expenses associated with any prospective claim. It's worth learning where the HOA insurance stops and yours should begin, so as to make sure no gaps exist that could leave you without coverage after damage occurs

What If the HOA Fails to Obtain Sufficient Insurance?

Your HOA should protect your interests as a homeowner. If your HOA purchases inadequate coverage or none at all, fails to buy coverage for a likely source of damage (such as flooding), or fails to keep up with premiums, it jeopardizes the investment you've made in your home.

If your HOA's governing documents require it to purchase certain types of insurance, you have the right to examine the paperwork and make sure that the HOA does what it is supposed to do.

Insuring your HOA property accurately can prevent the potential for hefty out-of-pocket expenses for unit owners at the time of a major property loss. Your Association should be insured, at full replacement cost. Information used to calculate building values should be based on research and accurate square footage obtained by your broker.

What is Contingent Liability?

Contingent Liability provides coverage for undamaged portions of property. For example, if half of a building burns down, the property insurance coverage will replace the half of the building that is damaged.

What is Third Party Bodily Injury Cover?

Third party bodily injury losses are slip and fall claims. Whether a person is supposed to be on the common area premises of the association or not, if he or she were to get injured, this cover would protect the Association.

What is Third Party Property Damage Cover?

This insures damage done to someone else’s property by your property. For example, a common area tree may fall onto a neighbour’s car or house. You want to be prepared for these circumstances.

Other Necessary Cover?

  • Coverage for Personal Injury (Libel, Slander)
  • Unit Owners as additional insured
  • Management as additional insured
  • No exclusion for Assault and Battery

  • What is Directors & Officers Liability?

    D & O Liability is defence (expenses) and indemnity (awards and settlements) for wrongful acts and allegations against the board of directors as well as the Association. This coverage is also known as Errors and Omissions Liability as this coverage provides for these types of losses as well.

    Typical D & O liability claims range from monetary to non-monetary, breach of contract to discrimination, to libel/slander. The majority of claims for Homeowners Associations are non-monetary, such as a claim that the board failed to purchase adequate insurance.

    Types of Cover that Should be Automatically Included
  • Coverage for Monetary and Non-monetary Claims
  • Coverage for Breach of Contract
  • Personal Injury (Libel and Slander)
  • Management as additional insured

  • Other Types of Cover available to HOAs
  • Workers Compensation
  • Employment Benefits
  • Employment Practices Liability

  • As your insurance broker, we function as the middle man between your Association and your Insurer, so feel free to ask for our advice and recommendations. You should not only feel protected by your insurance coverage but also feel comfortable with the hands in which you’ve placed your cover.


    What you need to know ...
    These are just some of the most frequently asked questions we receive about our HOA cover.

    1How do I go about getting an insurance quote for my Homeowners Association?
    You can contact us via many convenient methods: Complete the contact form on any of our web pages and we'll give you a call back. Phone us: 0800 43 49 48 e-mail us: info@grib.co.za
    2What can my association do to save on our policy premiums?
    We all want to save on insurance when we can. Anything that will help increase the safety of your community and reduce the likelihood of a loss may help reduce the premiums your association will pay. The more homeowners in your association who buy their own insurance coverage, the better off the association will be. It all comes down to loss experience – the frequency of claims and the rand amounts paid out for the claims. The lower your association's claim frequency, the lower the association’s premiums will be.
    3Are there requirements my association must always meet to be eligible for coverage?
    First of all, pay the premiums on time. Missed or late payments can cause problems if your association has a claim, or can result in the cancellation of your coverage. The information on all insurance applications must be accurate or claims may be denied. Your association must abide by all safety recommendations, regulations and local laws.
    4What important questions should I ask when considering which cover to choose?
    Are normal perils like acts of nature included, including: Hail, wind, storm, weather damage (storm, lightning), earthquake; Are Fire and Explosions covered? Or damage caused by the leakage or discharge of fire extinguishing equipment? Is normal risk such as theft of, or any damage caused by attempted theft of fixtures and fittings, covered? Does the policy include cover for civil commotion, SASRIA (riot and public disorder), public liability, trustees liability, labour disturbances and more; Are the water pipes and geysers (i.e. the water heating systems) covered for loss or damage following leaking and bursting? Is loss of rent in terms of risk, covered? Is bursting and/or overflowing of pipes and water tanks covered? Is slow leak damp over time, covered? A typical Body Corporate Insurance policy should include all the above, as well as perils such as: Power surges, fidelity, trustee liability, loss of water, locks and keys (eg. following a burglary), subsidence and landslip, accidental & intentional damages, to name just a few ...
    5How can I manage the association's exposure to claims?
    Claims against liability and accidental, can be managed & mitigated by ensuring and avoiding the following: Keep storage units clean, avoid loose fittings & pipes, loose bricks, tiles and paving, store gas safely and steps must have hand rails, communal braai area chimneys are up to standard, swimming pool properly enclosed. A safety expert can be consulted to audit the common property for fire and safety requirements;Also avoid dangerous electrical connections. Owners of Section Title units should have an updated copy of the Body Corporate’s policy and be informed of the rules, also with regards to excess, i.e. who pays the excess under which circumstances.


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