HOAs and Home Insurance: What You’re Responsible For—and What They Cover

By Adam Bakonis and the Mercury Team

Buying a home in a community with a homeowners association (HOA) can be great. You get shared amenities, maintained common areas, and sometimes a sense of neighborhood pride. But when it comes to insurance, many homeowners get confused about what their HOA’s master policy actually covers versus what they need to insure themselves.

In this guide, we’ll break down what an HOA neighborhood is, what HOA insurance typically covers, what you’re expected to handle with your own homeowners or condo policy, and how to make sure there aren’t any costly gaps in your coverage.

What is an HOA Neighborhood?

An HOA neighborhood is a residential community where a governing body (typically run by elected residents) enforces community rules, oversees maintenance, and manages shared amenities and property.

HOA neighborhoods can include a variety of housing types, such as:

• Condominiums
• Townhouses
• Single-family home subdivisions

Although HOAs are usually associated with attached housing like condos and townhomes, many single-family home communities, especially those developed in the last few decades, are also structured under the HOA model. The idea is to keep every home up to a certain standard to help enhance the community’s appearance and retain property values.

Key Features of an HOA Neighborhood

Here’s a closer look at what typically comes with living in an HOA community:

• HOA dues: You’ll pay a monthly or annual fee to help cover features like landscaping, security, or repairs in shared areas. Some of that money also goes toward the HOA’s insurance policy.
• Rules to follow (CC&Rs): Every HOA has a set of rules called Covenants, Conditions & Restrictions (CC&Rs), which outline what homeowners can and can’t do. These might cover details like how you paint your house, where you can park, or what kind of insurance you need.
• Shared spaces: Many HOA communities have common areas that everyone shares, such as parks, pools, sidewalks, or even building exteriors. The HOA usually maintains and insures these.

Do All Neighborhoods Have an HOA?

No, not every neighborhood has an HOA. According to the Foundation for Community Association Research, about 33% of the U.S. population lives in neighborhoods with HOAs, amounting to around 370,000 HOA communities nationwide as of 2024. HOAs are most common within condos, townhomes, and newly developed single-family homes. On the flip side, many older suburbs, rural communities, and city neighborhoods don’t have any formal HOA.

What Does HOA Insurance Cover?

When you live in a community with an HOA, part of your dues go toward a master insurance policy. This policy is purchased by the HOA itself, and it’s designed to protect the shared parts of your community. Here’s what they usually include:

• Common areas: Spaces everyone shares—e.g., hallways, lobbies, stairwells, and parking lots—are usually covered. For example, if a storm damages the community pool or a visitor slips in the lobby, the HOA’s insurance helps pay for repairs or liability costs.
• Exterior structures: The policy usually covers the outside of HOA-owned buildings, such as roofs and exterior walls, to help protect the overall property.
• Shared amenities: The master policy also protects amenities like playgrounds, elevators, pools, gyms, clubhouses, and tennis courts when accidents or disasters strike.

Knowing what your HOA’s policy includes is key since anything it doesn’t cover falls to you and your homeowners insurance. “Your HOA’s master policy usually has clear boundaries on what it will cover. Always check your HOA’s bylaws and ask for a copy of their insurance certificate so you know exactly what’s protected and what isn’t,” says Adam Bakonis, Senior Product Manager, State.

What Does Homeowners Insurance Cover?

While your HOA’s master policy takes care of the building’s exterior and shared areas, your homeowners insurance covers what’s inside your own walls and beyond. Here’s what you’re usually responsible for:

• Dwelling coverage: What is dwelling coverage? This part of your policy helps repair or rebuild the inside of your home—e.g., walls, floors, built-in cabinets, fixtures—if they’re damaged by covered events like fire, hail, or water leaks (from sudden pipe bursts, not gradual damage).
• Personal property: Homeowners insurance also covers your belongings, including furniture, electronics, clothing, and appliances. If your items are stolen or damaged in a covered event, your policy helps pay to repair or replace them. The HOA’s insurance never covers personal property inside your unit.
• Liability protection: If someone gets hurt in your home or you accidentally cause damage to someone else’s property (like a kitchen fire that spreads to a neighbor’s unit), your homeowners insurance can cover legal fees, medical bills, or settlement costs. HOA insurance doesn’t extend to these personal liability situations.
• Additional living expenses: If your home becomes unlivable due to a covered event (like a fire or severe storm), this part of your policy helps pay for temporary housing, meals, and other extra costs you face while your home is being repaired or rebuilt.

Can an HOA Require You to Carry Homeowners Insurance?

Yes, HOAs can require you to have homeowners insurance, as long as this requirement is included in the HOA’s governing documents, like the Covenants, Conditions, and Restrictions (CC&Rs) or bylaws. Even though most lenders require homeowners insurance for your mortgage, many HOAs have their own guidelines to make sure every resident is properly covered.

HOAs may also set minimum coverage requirements to make sure owners can pay for damage originating in their units that could affect others. These requirements may include:

• Dwelling coverage: Enough to rebuild your unit’s interior to its original condition.
• Personal liability coverage: Typically, $100,000 to $500,000 to cover injuries or damage you cause.
• Loss assessment coverage: Some HOAs may require this endorsement, which helps pay your portion of big losses or community-wide claims when the master policy doesn’t cover everything after a disaster.

If you don’t keep the required insurance, you could break your HOA agreement and face fines or other penalties. Plus, you might end up paying huge repair or liability costs out of your own pocket.

Looking for the right coverage? Mercury Insurance offers customizable homeowners insurance options designed to meet your HOA’s requirements.

HOA Insurance vs. Homeowners Insurance: Key Differences

To make it easy to see what each policy does and doesn’t cover, here’s a side-by-side comparison so you know exactly where your responsibilities begin:

Feature	HOA Insurance	Homeowners insurance
Who purchases?	The HOA (paid via member dues/fees)	Individual homeowner
Primary coverage focus	Common/shared areas, HOA-owned property, and association liability	Individual residence, personal property, and personal liability
Covers building structure?	Only shared structures	The homeowner’s dwelling and attached structures
Covers personal property?	No	Yes (furniture, electronics, clothing, etc.)
Covers liability?	Yes, but only for incidents in common/shared areas	Yes, for incidents inside the home or on the homeowner’s lot
Covers loss of use?	No	Yes (additional living expenses if home is uninhabitable)

Even if your HOA has a robust master policy, you still need personal homeowners insurance to cover what the HOA doesn’t, including your belongings, liability inside your home, and any improvements you’ve made.

Special Consideration: Condo Insurance

If you own a condo, your insurance needs to work a little differently. Unlike a house, you don’t own the whole building—just the inside of your unit.

The condo association’s master policy usually pays for damage to the building’s exterior and shared spaces like hallways, lobbies, or the roof. But it typically stops at your unit’s walls, meaning you need your own condo insurance (called an HO-6 policy) to protect what’s inside.

A standard condo insurance policy covers:

• Your unit’s interior: Walls, floors, cabinets, and built-in features.
• Your belongings: Furniture, clothes, electronics, and more.
• Personal liability: If someone gets hurt in your condo or you accidentally damage a neighbor’s property.
• Loss of use: If you need temporary housing after a covered loss.
• Loss assessment: If a big claim exceeds the condo association’s policy and owners have to pitch in.

The biggest difference from regular homeowners insurance? You’re only insuring the inside of your condo, not the building or the land outside, which is up to your condo association.

Do Insurance Needs Differ for Condos, Townhouses, and Single-Family Homes?

Yes, insurance needs can vary quite a bit depending on the type of home you own and how your community’s HOA is set up.

Here’s a quick breakdown:

Home Type	What You Own	Recommended Insurance
Condo	Interior of the unit only	Condo insurance (HO-6 policy)
Townhouse	Interior, and sometimes the exterior	Condo (HO-6) or homeowners (HO-3), depending on the HOA
Single-Family Home	Entire structure and the land it sits on	Standard homeowners insurance (HO-3 policy)

In most condo buildings, you only need to insure what’s inside your walls. For single-family homes, you’re responsible for the entire structure and property. Townhouses fall somewhere in between. The right policy depends on how much of the structure is covered by your HOA’s master policy.

Tips for Avoiding Coverage Gaps

Even if you and your HOA both have insurance, gaps can still happen. Here’s how to make sure you’re fully protected:

Review Your HOA’s Policy Carefully

Don’t just assume your HOA’s master policy covers everything you need. Ask for a copy of the policy or a summary, and read it closely to see exactly what’s included and what’s not.

Talk to an Insurance Expert

A licensed insurance agent can help you figure out where your HOA’s coverage stops and where you need to start. They’ll explain what type of homeowners or condo insurance you need to fill in the gaps.

Ask About Loss Assessment Coverage

Loss assessment coverage helps pay your share of the costs if your HOA charges owners extra after a large loss. This add-on can save you big if your HOA’s insurance isn’t enough to cover a major claim, like fire damage or a storm that affects shared areas.

Why Choose Mercury Insurance?

Whether you live in a single-family house, a condo, or an HOA community. Mercury Insurance has you covered. Our policies are customizable, so you can tailor your coverage to fit your needs and fill any gaps left by your HOA’s insurance. Plus, our expert agents work with you to make sure you’re fully covered at a price you can afford.

Contact us today for a fast, free quote!