Homeowners often wonder what the differences are among HOAs, townhome associations, and COAs. How does insurance coverage apply to each? It’s important to get it right so there are no coverage gaps. Let’s take a deeper dive:

Homeowners Association (HOA)

  • Single-family homes located within a development or neighborhood.
  • The HOA has deeded ownership of common areas and property (sidewalks, clubhouse, pool, tennis courts, etc.), and by paying HOA dues/fees, each homeowner is granted a right to use the common areas.
  • Every homeowner owns their land and the real property attached to it, and are free to sell their interest as they see fit. The HOA maintains the common areas and monitors/enforces its covenants and restrictions, as indicated in the Declaration of Covenants, Conditions, and Restrictions (CC&R).  However, the CC&R is not recorded in any land records.
  • Every homeowner carries insurance coverage on their home and property (HO3 or DP3) – if their house burns down or someone is injured on their property, their homeowners insurance coverage is responsible (not the HOA). If the clubhouse burns down or someone is injured on common property, the HOA’s commercial policy would respond.

Townhome Association

  • Townhome associations are similar to HOAs, but sometimes confused with COAs.
  • Every townhome owner owns their building outright – roofs, floors, and walls – and can sell their interest in that home as they see fit.
  • The townhomes are built so that each home shares walls with the others. Any building item specific to the townhome is owned by that owner.
  • The townhome association may also have common areas (clubhouse, fitness building, tennis courts, etc.) that each owner has a right to use by paying dues/fees.
  • Similar to the HOA/single family homes, every townhome owner carries property insurance (HO3 or DP3) for the full amount of their building and liability for their premises. The association carries commercial insurance for any commonly-owned buildings and common areas.

Condominium Owners Association (COA)

  • In a condominium association (COA), there is joint ownership of common elements and areas, including the building that is divided into individual condominium units that are individually owned. The CC&R is recorded in county land records.
  • Unit owners own their condo units outright and can sell their interest, but the association bylaws will indicate how far that ownership extends. Typically the walls, floors, and roof framing (called the “shell” of the building) are owned by the association; the unit owners own everything else from the drywall in (e.g., flooring, cabinets, fixtures).
  • Florida Statute 718.111 (11) specifically addresses condo insurance.
  • Condo unit owners should insure their building and personal property under an HO6 policy. The COA carries commercial insurance on the portion of the building it owns.

When considering what type of association you have, there are a few basic questions to ask:

  • What do the CC&Rs state? This will most likely answer the question as to who is responsible for which part of the building.
  • What type of real property is administered by the association?
  • What information does the county Property Appraiser have (single family, townhome, condo unit)?

Once you have your answers, contact your Tower Hill Personal or Commercial Lines Underwriter to get the right coverage in place.

Brian Hunt, AIC, CPCU

About Brian Hunt, AIC, CPCU

Commercial Underwriter II
Tower Hill Insurance Group

Brian started his insurance career with State Farm in St. Paul, MN, in 1998. In addition to handling property and liability claims, he served as part of the National Catastrophe Team, following tornadoes, hurricanes, and hailstorms across the country. He made several friends named Charley, Frances, Jeanne, Ivan, Wilma, and Katrina. He moved to Florida in 2009 to manage a catastrophe office in Jacksonville, and because of a girl (now wife) his path led him to Gainesville and Tower Hill Insurance. In his free time, Brian is an Ironman triathlete and also enjoys writing about local and national history.