Understanding Risk in Florida HOAs: What You’re Actually Responsible For

Florida is one of the fastest-growing states in the U.S. From new coastal developments in Naples to sprawling master-planned communities outside Orlando and Tampa, neighborhoods governed by homeowners associations (HOAs) are popping up everywhere. HOAs bring structure, maintain aesthetic standards, and protect property values—but with that comes a level of responsibility that’s often underestimated.

Whether you’re a board member, a property manager, or just a curious resident, understanding how risk works in a Florida HOA is critical. Because here’s the truth: one lawsuit, one major weather event, or one oversight in policy could cost your community hundreds of thousands—if not millions—of dollars.

In this post, we’re laying the foundation for our 12-part series on Florida HOA insurance by looking at:

• What HOAs are responsible for in the Sunshine State
• Florida’s unique risk landscape
• Common types of exposure (and why they matter)
• The importance of properly structured insurance
• Why all of this is about more than checking a box—it’s about safeguarding your community

Let’s dive in.

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What Does a Florida HOA Actually Do?

First, a quick reality check: running an HOA isn’t just about choosing the right flowers for the front gate or approving mailbox designs. Florida HOAs function like miniature governments. They collect dues, enforce rules, maintain shared spaces, and often own and manage significant physical assets.

According to Florida Statutes Chapter 720, HOAs are typically responsible for:

• Maintaining common areas like roads, sidewalks, and green spaces
• Managing amenities such as clubhouses, pools, tennis courts, and dog parks
• Maintaining drainage and stormwater systems (ponds, swales, retention areas)
• Enforcing architectural controls and rules
• Handling financial matters such as dues, reserves, and vendor contracts
• Employing or contracting with service providers
• Communicating with homeowners and resolving disputes

Each of these responsibilities introduces operational, financial, and legal risk. And if they’re not managed correctly, they can spiral into lawsuits, budget shortfalls, or worse—damage to the community’s reputation and long-term viability.

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Real-World HOA Liability: Examples You Can’t Ignore

Let’s look at a few real examples that show just how serious HOA liability can be in Florida:

🌳 Case #1: Overgrown Landscaping Causes Fatal Car Crash

A Florida HOA was hit with a $12 million judgment when a driver ran a stop sign obscured by untrimmed bushes on common property. The HOA was found partially liable because they failed to maintain visibility at the intersection.

🏊 Case #2: Pool Injury Results in Lawsuit

A child was injured at a community pool with a broken gate latch. The parents sued the HOA for negligence, claiming improper maintenance and supervision. Defense costs exceeded $100,000—even though the HOA ultimately prevailed.

🌀 Case #3: Hurricane Damage Reveals Insurance Gaps

After Hurricane Irma, a Central Florida HOA discovered that its policy had a hurricane deductible of 5% of insured value—totaling over $150,000. Without adequate reserves, the HOA had to levy special assessments on residents, leading to financial strain and multiple homeowner disputes.

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Florida’s Unique Risk Landscape

Florida isn’t just another state—it’s a hotbed of natural disasters, regulatory requirements, and litigation. Here’s why running an HOA here comes with even more responsibility:

1. Hurricanes and Tropical Storms

Every year, Florida communities hold their breath during hurricane season. These storms can cause catastrophic damage to roofs, landscaping, clubhouses, fences, signage, and electrical systems. HOAs must ensure they have windstorm and hurricane coverage (often excluded or capped) and high enough limits to replace what they’re insuring.

2. Flooding

Flooding is the most common natural disaster in Florida. Yet, standard commercial property policies exclude flood damage unless a separate flood policy is purchased. If a retention pond overflows or water infiltrates the clubhouse, the HOA could be on the hook—unless flood insurance is in place.

3. Sinkholes and Ground Movement

Certain areas, particularly Central Florida, are prone to sinkhole activity. While sinkhole coverage can be added to property insurance, it’s often excluded by default. Without this coverage, structural collapse could financially devastate a community.

4. Litigious Environment

Florida has one of the highest rates of civil litigation in the country. HOAs frequently face lawsuits from homeowners over rule enforcement, property damage, disputes with vendors, or allegations of mismanagement. Directors & Officers (D&O) liability insurance is a must-have.

5. Evolving Legal Landscape

Florida laws governing HOAs and condominiums change regularly—especially after major events like the Surfside condo collapse in 2021. HOAs must stay compliant with reserve funding laws, financial transparency, and board governance rules, all of which introduce legal exposure.

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Common Risk Areas for Florida HOAs

Let’s break down the primary categories of risk Florida HOAs must account for:

Category	Risk Examples
Property	Wind/hurricane damage, fire, theft, vandalism, flood, mold, sinkholes
Liability	Trip-and-fall accidents, pool injuries, dog bites, tree falls
Governance	Allegations of discrimination, unfair enforcement, conflict of interest
Financial	Embezzlement, fraud, poor reserve planning, vendor disputes
Employment/Contractor	Injuries to vendors or volunteers, wage claims, improper insurance documentation
Cyber/Data	Breach of homeowner data, phishing, wire fraud

Each of these areas requires risk mitigation (more on that in future blogs) and, often, insurance policies to provide financial protection when things go wrong.

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What Happens When Things Go Wrong?

Without proper insurance, HOAs are left to fend for themselves. That means:

• Dipping into reserves meant for future repairs
• Imposing special assessments on residents (often $1,000+ per household)
• Facing long, expensive legal battles
• Losing the trust of homeowners
• Discouraging board volunteers due to personal liability fears

In some cases, inadequate coverage leads to community-wide financial distress. Property values may drop, homeowners may default on dues, and vendors may refuse to work with the association. All because the HOA didn’t have the right protections in place.

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Insurance: The Financial Tool Every HOA Needs

Think of insurance as a tool for financing risk. You can’t eliminate every risk your HOA faces, but you can transfer the financial burden to an insurance company—provided you choose the right policies, limits, and endorsements.

Here are the major coverages that every Florida HOA should consider (we’ll explore these in depth in upcoming blogs):

• General Liability – Covers bodily injury/property damage on common areas
• Property Insurance – Covers buildings, fences, amenities, and landscaping
• Directors & Officers (D&O) – Protects board members from personal liability
• Crime/Fidelity Bond – Protects against theft or embezzlement of HOA funds
• Workers’ Compensation – Covers injuries to employees or volunteers
• Umbrella Insurance – Provides extra liability coverage beyond other policies
• Cyber Liability – Covers data breaches, fraud, and ransomware
• Flood & Earth Movement (Optional) – Covers excluded natural perils

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Getting Your Community Informed and Involved

Insurance isn’t just a “board member thing.” It affects every homeowner, because the HOA’s financial stability impacts property values, dues, assessments, and even mortgage approval rates.

HOA leadership should:

• Hold annual insurance review meetings with their agent and members
• Provide simple coverage summaries to homeowners
• Discuss insurance during budget planning
• Create a risk management committee or task force
• Encourage residents to carry appropriate loss assessment coverage on their personal homeowners policy (more on that next week)

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The Role of a Specialized Insurance Partner

Navigating Florida’s insurance market is no small feat. Rates are rising, carriers are tightening underwriting, and many policies have complex exclusions that can leave HOAs exposed. Working with a Florida-based insurance partner—like Florida Risk Partners—gives your HOA:

• Access to competitive carriers that specialize in HOA risks
• Deep knowledge of Florida-specific laws, perils, and underwriting requirements
• Guidance on building a risk management strategy (not just buying a policy)
• A 24/7/365 online quoting platform to request and manage coverage anytime

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Final Thoughts: Don’t Wait for a Crisis

You never want to learn the value of insurance after a claim is denied or a lawsuit is served. Risk doesn’t wait—and in Florida, neither do hurricanes or legal complaints.

The good news? You don’t have to be an insurance expert to make smart choices. You just need the right partner and a little education—which is exactly what this blog series is here to provide.