What Homeowners Insurance Not Cover: Every HOA Member Should Know
Homeowners’ insurance does not cover everything, but it is intended to safeguard your home, which is your most valuable asset. Standard policies contain exclusions that can leave homeowners, particularly those in California HOAs, vulnerable in the event of earthquakes or shared community structures if they do not have the appropriate supplemental coverage.
Most homeowners think that all losses are covered by their insurance. Regretfully, that isn't always the case. Understanding the difference between personal homeowners insurance and HOA insurance in California is crucial if you're a member of a Homeowners Association (HOA) in California. Unwanted surprises regarding shared areas, infrastructure damage, and natural disasters can result from coverage gaps.
What Does Standard Homeowners Insurance Typically Cover?
Homeowners’ insurance coverage insures your home and personal property and provides protection against certain liabilities. However, exclusions and coverage limits can vary, particularly in California, where suburban homeowner association communities and natural disasters make things even more complicated.
| Coverage Type | What It Includes |
| Dwelling Coverage | Protects the physical structure of your home, including walls, roof, and foundation. |
| Personal Property | Covers personal belongings like furniture, clothing, and electronics. |
| Liability Protection | Pays for legal fees and damages if someone is injured on your property. |
| Additional Living Expenses | Covers hotel stays, meals, and other costs if your home becomes uninhabitable. |
While this coverage may seem comprehensive, it's important to review policy limits and exclusions, particularly in high-risk states like California, where hazards such as earthquakes, wildfires, and shared HOA infrastructure require additional protection.
What Homeowners Insurance Doesn’t Cover
1. Earthquakes and Floods
Flood and earthquake damage are not covered by standard homeowners insurance. This is a serious issue in California, a state with a high risk of earthquakes.
Despite the frequent seismic activity in California, only 10% of homeowners have earthquake insurance, according to the California Earthquake Authority.
Source: California Earthquake Authority (CEA) Statistics
To be fully protected, you must purchase separate earthquake or flood insurance.
2. Maintenance Issues or Neglect
If damage results from lack of maintenance, such as mold from a leak you didn’t fix or termites due to neglect, it won’t be covered. Homeowners insurance isn’t designed for preventable damage.
3. HOA-Managed Structures and Common Areas
Your HOA probably insures the common areas and building exteriors if you reside in a gated community or condo. However, shared structures such as these are not covered by your personal homeowners policy.
- Club Houses
- Swimming pools
- Community fences and gates
- Hallways or stairwells in condos
Many owners misunderstand what their HOA master policy covers, leading to coverage gaps. That’s why understanding the coverage of your HOA insurance in California, especially in dense areas like Los Angeles, Orange County, and San Diego, is critical.
4. Pricey Goods
Expensive items like jewelry, fine art, or collectibles may not be fully covered by homeowners' insurance. Think about scheduled personal property endorsements if your valuables surpass the policy limits.
5. Home-Based Business Liability
Running a small business from your home?
Your homeowners' insurance likely won’t cover:
- Loss of inventory
- Damage to business equipment
- Liability from clients visiting your home
You’ll need separate business coverage or a home business rider.
Key Differences: Homeowners Insurance vs. HOA Insurance
| Coverage Type | Homeowners Insurance | HOA Insurance (Master Policy) |
| Dwelling Coverage | Yes (interior/exterior of your unit) | Yes (shared structures, exterior walls, roof) |
| Personal Belongings | Yes | No |
| Liability (Inside Unit) | Yes | Sometimes, for shared areas only |
| Common Areas | No | Yes (pool, clubhouse, sidewalks, etc.) |
| Maintenance Negligence | No | No |
To ensure full protection, homeowners in HOAs should have both personal homeowners insurance and be aware of what’s covered by their HOA insurance.
Endnote
Knowing what your homeowners insurance excludes, especially in an HOA, is the best way to avoid any unpleasant financial surprises. From natural disasters to liability for shared property, the holes can be large. This is particularly true in California, where issues with the environment and community development are abundant in this State, so reviewing your coverage and the type of insurance with HOA insurance in California is a smart thing to do.