How are homeowners associations and insurance law connected?

When purchasing a house, some people purposely seek out neighborhoods with homeowners associations. Others may prefer to settle down somewhere without an HOA, but limited housing opportunities in some areas of Washington might make it impossible to do so. In either situation, homeowners may need a more thorough understanding of how HOA bylaws and insurance law interacts.

HOAs provide both liability and hazard insurance for the neighborhood. In some situations, that insurance coverage may extend to residents’ homes even if they have individual homeowners’ insurance. HOAs can file claims for damage caused by a number of things, including broken water lines and storm damage. Claims for people’s homes rather than shared community spaces are usually the result of widespread damage.

Unfortunately, insurance companies frequently deny claims submitted by HOAs. Insurance companies tend to use confusing and even manipulating language when describing policy coverage, making it easier for them to refuse even legitimate claims. HOAs are rarely provided with explanations. This can make it harder to appeal these decisions. Also some claim processes are simply more complicated due to the nature of damages, which can draw out an already lengthy process.

Washington homeowners may feel as if insurance law is not on their side. While it is true that insurance companies often refuse to pay for legitimately covered claims, this does not mean that policyholders must accept this as a final decision. Thoroughly reviewing policy coverage can help homeowners decide whether they should question why their claim was denied. In some situations, securing the guidance of an experienced professional is necessary for holding insurance companies accountable for their actions.