Homeowners Insurance Requirements: Enforcing Peace of Mind

Why Every HOA Should Enforce Homeowner Insurance Requirements

It’s a scenario that plays out more often than many boards expect: a homeowner approaches the association asking to use the HOA’s master insurance policy to cover damages inside their unit. Sometimes, that request reveals something more troubling — the owner may not have individual homeowners insurance (often called an HO-6 policy).

This moment can leave a board wondering: Is this really our responsibility? What if something bigger happens, like a fire or flood? And what tools do we have to enforce our community’s insurance requirements?

Here’s a breakdown of what boards should know and do to protect both individual members and the community’s collective financial health.

1. Is This the Board’s Responsibility? A Quick Checklist

Not every issue inside a unit falls to the HOA. The dividing line often depends on what’s covered by the master policy and what’s considered the homeowner’s responsibility. Boards can ask:

• Does the damage involve common elements? (e.g., roof, exterior walls, shared plumbing)

• Does the governing document assign this repair to the association?

• Would the master policy normally cover this type of damage?

• Has the owner provided proof of an active HO-6 policy as required?

If the answer to the last question is no, the board may need to take additional action.

2. Where to Find the Rules

The bylaws, declaration (CC&Rs), or insurance resolution usually spell out insurance requirements. Common language includes:

• The association maintains a master policy for the structure and common elements.

• Each homeowner must carry their own insurance for the interior of the unit, personal belongings, and liability.

• Proof of coverage must be provided upon request, often annually.

These documents are the board’s authority. If they’re unclear, your association may want to adopt a more detailed insurance resolution that closes any gaps.

3. Why It Matters: The Risk of Ignoring Insurance Compliance

When boards don’t enforce insurance requirements, the community is exposed to:

• Financial risk – If a unit owner causes a fire or water damage and has no policy, the association or other homeowners may bear the cost.

• Legal liability – Injuries inside a unit could trigger lawsuits against the HOA if the owner lacks liability coverage.

• Higher premiums for everyone – One uncovered loss can push up master policy premiums, assessments, or even make coverage harder to obtain.

Ignoring the problem may seem easier in the short run, but one accident can put the entire association at risk.

4. How to Enforce Homeowner Insurance Requirements

Boards have several tools at their disposal:

1. Annual proof of insurance – Request certificates of insurance from every homeowner.

2. Reminder letters – If proof isn’t provided, send a notice reminding them of their obligation.

3. Deadlines – Give owners a clear timeframe (often 30 days) to submit coverage.

4. Force-placed insurance – If an owner fails to comply, the association may purchase a policy for that unit and assess the cost back to the owner.

Force-placed policies are usually more expensive and less comprehensive, but they protect the community and encourage compliance.

5. Anticipating Resistance (and Owner Rights)

Not every homeowner will accept enforcement quietly. Boards may hear:

• “The master policy should cover this.” – A common misconception that needs to be clarified.

• “You can’t force me to buy insurance.” – In fact, most governing documents give boards this power.

• “This is too expensive.” – While costs vary, not having coverage exposes both the owner and the community to far greater losses.

Homeowners also retain rights: they can request clarification of governing documents, appeal board decisions, or even challenge enforcement in court. This is why consistent, transparent, and documented procedures matter.

6. The Action Plan That Works

A best-practice sequence looks like this:

1. Send a reminder notice – A “nudge” letter encouraging proof of coverage.

2. Escalate if needed – Second notice with clear deadlines.

3. Force-place insurance – Association purchases a unit-specific policy.

4. Assess the cost back – Premiums are charged to the homeowner’s account.

This approach balances fairness with protection, ensuring compliance without leaving the community vulnerable.

The Bottom Line

Enforcing homeowner insurance requirements isn’t about being heavy-handed — it’s about protecting everyone. Insurance compliance:

• Safeguards each resident’s home and belongings

• Shields neighbors from shared financial risks

• Preserves the collective investment in the community

For board members, the responsibility is clear: don’t wait for a crisis to expose the gaps. Take proactive steps now, and your community will be stronger, safer, and financially healthier.