HOA Sued for $20 Million


Are you in a HOA?  If so this is very important to you!!!!

There was a case in Nevada that a HOA was sued in court and lost a 20 million dollar lawsuit.  What happened was a kid was sitting on a swing set.  The top bar came loose and struck the kid in the head causing great injury.  Here is a link to the news video below.



A typical insurance policy for a HOA is 1 million dollars and there is a policy to cover director and officers for 1 million.  In order for the HOA to pay off the rest of the settlement they would need to assess the homeowners of the association to cover the remaining amount of the lawsuit.

The question becomes this.  How can a home owner protect themselves from similar situations? 

1.     Make sure to be involved in your HOA.
2.     Make sure the community has voted in competent board members.
3.     Keep an eye out in the community of potential safety hazards.   
4.     Make sure you have “Loss Assessment Coverage” on your homeowner’s policy.

Loss Assessment coverage will cover up to the limit in the policy for assessments levied against the homeowner for a covered loss.  Let’s use this news story as an example.  If you were a homeowner in this HOA, you will be covered up to the limit in your policy for your portion of the assessment.  Without this coverage, you are responsible for the assessment.       

Not all policies have this coverage automatically added.  If you live in a HOA make sure you call your insurance agent and have them add this coverage.  It’s not very expensive to have this coverage, but it will cost you a lot if you need it, and don’t have it. 

Raymond E. Grim is an insurance agent with American Family Insurance.  He has been serving the Surprise, AZ area since 2001.  Raymond specializes in auto insurance, home insurance, life insurance, and business insurance.  Raymond is also an active member of the Surprise Regional Chamber of Commerce.  Raymond along with his wife are also associate pastors for CFTN Surprise.  Raymond along with his staff gives honest and quality service for your insurance needs. 

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