HOA Insurance Basics: Florida Laws, HOA vs. Homeowner Coverage

If you’re on the board of a homeowners association (HOA) in Florida—or just live in one—you’ve probably asked yourself this question:

“What insurance are we actually supposed to have?”

It’s a fair question. Insurance laws and policies for HOAs are often written in legalese. And unlike condominiums, Florida HOAs operate under a different statute, with far fewer insurance mandates. Add in the complexities of Florida’s hurricane risk, flood zones, and high litigation environment, and it’s easy to see why many HOAs get overwhelmed or, worse, underinsured.

This post is designed to give you a clear, actionable breakdown of the basics:

• What Florida law says about HOA insurance
• Which responsibilities fall to the HOA vs. individual homeowners
• Common gaps in coverage (and how to avoid them)
• Tips to align your policies with your governing documents
• Why getting it wrong can lead to assessments, lawsuits, or worse

Let’s clear up the confusion so you can protect your community the right way.

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🧾 What Florida Law Actually Requires

Let’s start with the statute itself.

Florida HOAs are governed by Chapter 720 of the Florida Statutes. And compared to condominium associations (regulated under Chapter 718), this law is light on mandatory insurance requirements.

🛡️ The One Required Policy: Crime/Fidelity Bond

Florida law only mandates one type of insurance for HOAs:

Fidelity bond or insurance policy covering those who control association funds.

That means anyone who can sign checks, transfer funds, or access bank accounts—think board members, officers, and management companies—must be covered by a crime or fidelity bond policy. This protects against theft, fraud, or embezzlement.

Important: This requirement can only be waived by a majority vote of the association’s members each year. But most experts agree: you shouldn’t waive it. Even small HOAs handle significant amounts of money.

🧑‍⚖️ What About Liability, Property, D&O?

Technically, not required by Florida law. Instead, your HOA’s governing documents (Declaration of Covenants, Bylaws, Articles of Incorporation) dictate what coverages your association must carry.

Still, just because the state doesn’t mandate a policy doesn’t mean it’s optional from a practical standpoint. General liability, property, and Directors & Officers (D&O) coverage are all essential for proper risk management—and often required by mortgage lenders, vendors, or umbrella carriers.

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🏠 HOA vs. Homeowner: Who Insures What?

This is the most common—and most misunderstood—question we get from HOA boards and residents alike.

Here’s a basic breakdown:

Covered By	Responsibility
HOA	Common areas, amenities (clubhouse, pool, signage), entry gates, shared landscaping, perimeter walls, stormwater systems, association-owned structures
Homeowner	Personal residence (interior and exterior), personal property, liability inside the home, additional living expenses after a covered loss

Seems straightforward, right? Not so fast.

🏘️ Gray Areas in Townhome and Patio Home Communities

In some Florida HOAs—especially those with attached homes—the HOA might be responsible for roofing, exterior walls, or building shells. Others leave those entirely to the homeowners.

That’s why your HOA’s Declaration of Covenants is critical. It usually spells out who is responsible for what. If you haven’t read it lately (or ever), now’s the time.

🛠️ Pro Tip: Work with an insurance broker who will review your governing docs and match your coverage accordingly. Too many HOAs assume the agent knows the rules—then find out during a claim that they were underinsured.

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🚨 Real Risk: When the Lines Blur

Let’s look at some real-world scenarios that show how murky things can get:

📍 Scenario 1: Tree Damage

A tree in a common area falls during a storm and damages a homeowner’s fence. The HOA had skipped liability coverage to save money. Now, they’re facing a $7,000 repair bill and an angry homeowner threatening legal action.

📍 Scenario 2: Insurance Gap on Building Shells

A Florida HOA mistakenly believed the homeowners insured their own exterior walls. After a fire damaged three townhomes, they realized their property policy excluded buildings—and the homeowners only insured interiors. Result? A six-figure special assessment to rebuild the structures.

📍 Scenario 3: Underinsured Common Property

A storm damages a clubhouse roof and pool equipment. The HOA had not updated their coverage limits in years. The claim payout fell short by $60,000. With no reserves, the board levied an emergency assessment of $750 per household.

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💥 Avoiding Coverage Gaps

Let’s be honest: nobody reads their insurance policies for fun. But not understanding your HOA’s insurance setup can lead to financial disaster.

Here’s how to stay ahead:

✅ 1. Match Coverage to Responsibilities

Make sure your policies align with your governing documents. If your HOA is responsible for exteriors or roofs, the property policy should reflect that. If you maintain stormwater ponds or trails, ensure those areas are covered by general liability.

✅ 2. Maintain Adequate Property Limits

Use a qualified appraiser to determine replacement cost for buildings and amenities. Don’t just guess—or copy last year’s number. Underinsuring is one of the most common mistakes we see.

✅ 3. Understand Deductibles

Many Florida policies include hurricane deductibles that are a percentage of insured value. A 3% hurricane deductible on a $2 million clubhouse = a $60,000 out-of-pocket cost before insurance kicks in.

HOAs should build these deductibles into their reserves or risk passing the bill to homeowners after a storm.

✅ 4. Confirm Coverage on Non-Owned Structures

Does your HOA insure signage, fences, lighting, or landscaping that’s on city-owned land but maintained by the HOA? These often fall into a gray zone and need clarification.

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📜 What About the Homeowners?

Your HOA policy doesn’t cover individual homes or personal belongings.

Homeowners should carry an HO-3 (standard homeowners policy) or HO-6 (for townhomes or condo-style homes) that includes:

• Dwelling coverage (if required by the docs)
• Personal liability
• Loss of use
• Loss assessment (more on this below)

🎯 Encourage all homeowners to review their policies annually and verify they align with the HOA’s insurance setup.

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🧾 The Overlooked Hero: Loss Assessment Coverage

This rider on a homeowner’s policy covers special assessments levied by the HOA when insurance falls short after a covered loss.

🔍 Example:

A hurricane damages the pool area and the HOA’s insurance doesn’t fully cover the rebuild. The board issues a $2,000 assessment per homeowner. Those with loss assessment coverage can file a claim with their personal insurer—often up to a $10,000 limit—for reimbursement.

Given Florida’s high hurricane deductibles and rising insurance costs, this coverage is more valuable than ever. It’s typically very affordable—often under $50/year.

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🌴 Florida-Specific Considerations

Why do we make such a big deal about all of this in Florida?

Because the stakes are higher here. Let’s recap:

• Natural Disasters: Hurricanes, floods, and sinkholes aren’t “what-ifs”—they’re when.
• Litigation Risk: Florida leads the nation in HOA-related lawsuits.
• Tightening Markets: Insurance carriers are raising rates, reducing capacity, and getting more selective.
• High Home Values: One underinsured claim can lead to catastrophic losses or devalued properties.

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🧠 Education = Prevention

Many insurance-related disputes stem from one thing: confusion. Homeowners think the HOA will cover a loss. The board thinks homeowners will handle it. Meanwhile, nobody wants to foot the bill.

Educating your board and your homeowners can prevent most of these problems. Consider:

• Hosting an annual insurance Q&A with your agent
• Sending out a one-pager that outlines “What We Cover vs. What You Cover”
• Including insurance overviews in new homeowner welcome packets
• Reviewing policies every year (not just renewing them as-is)

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🤝 Work with a Florida HOA Specialist

Insurance for HOAs isn’t a side hustle—it’s a specialty. Florida HOAs in particular require agents who understand:

• Flood zone mapping
• Hurricane deductibles
• Statutory requirements under Chapter 720
• Multi-policy structuring (D&O, property, GL, umbrella, etc.)
• The nuances of HOA documents and coverage alignment

At Florida Risk Partners, we’ve built our reputation on making this process easy. Our 24/7 platform allows you to request quotes, review options, and manage your coverage on your terms—day or night.

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📝 Ready to Review Your Coverage?

Insurance doesn’t have to be a mystery—or a hassle. Florida Risk Partners can help you build a smarter, stronger insurance strategy for your HOA.

➡️ Request your quote now through our 24/7 online platform. No phone calls. No waiting on office hours. Just clear, Florida-specific insurance guidance when you need it most.