Important Information for HOA Boards

Selection of Insurance Coverage

It is in the best interest of most homeowner associations to obtain insurance policies that offer "guaranteed replacement cost coverage with full building code upgrades.” This guarantees that the association will be required to pay only the deductible in the event of an insured loss.

Forms of available coverage for buildings:

  • Guaranteed replacement cost coverage with full building code upgrades pays replacement costs without regard to policy limits, and includes costs resulting from code changes. In the event of any covered loss, the insurance company will pay the full amount needed to repair or replace the damaged or destroyed building with like or equivalent construction regardless of policy limits. The amount of recovery will be reduced by any deductible.
  • Guaranteed replacement cost coverage with limited or no building code upgrades pays replacement costs without regard to policy limits but limits or excludes costs resulting from code changes. In the event of any covered loss, the insurance company will pay the full amount needed to repair or replace the damaged or destroyed building with like or equivalent construction regardless of policy limits. The amount of recovery will be reduced by any deductible. This coverage does not include all additional costs of repairing or replacing the damaged or destroyed building to comply with any new building standards (such as building code or zoning laws) required by government agencies and in effect at the time of rebuilding.
  • Replacement cost coverage pays replacement costs up to policy limits. In the event of any covered loss, the insurance company will pay to repair or replace the damaged or destroyed building with like or equivalent construction up to the policy's limit of liability. The amount of recovery will be reduced by any deductible. To be eligible to recover replacement costs, associations must insure the building to 100% of its replacement cost at the time of loss.

 

Union America
Insurance Agency

A California Corporation

5776 Lindero Canyon Road, Suite D-482
Westlake Village, CA 91362
Direct: 818-292-2118  Office: 818-991-0091
License # 0K01653