HOA Insurance Coverage: What Title Companies Should Verify to Protect Buyers

HOA insurance policies are often overlooked during closings, yet they play a critical role in protecting homeowners and communities. From liability coverage to structural insurance, gaps or ambiguities in HOA policies can lead to costly surprises for buyers—and potential liability for title companies. This post explores how title professionals can use COCRS to verify HOA insurance coverage and ensure buyers are fully informed.

Why HOA Insurance Matters

HOAs typically carry insurance for:

• Common areas (clubhouses, pools, landscaping)
• Structural coverage for shared walls or roofs (especially in condos/townhomes)
• Liability protection for accidents or injuries on HOA property
• Directors & Officers (D&O) insurance for board member decisions

Buyers may assume these policies cover more than they do—or may not realize they need supplemental coverage.

Risks for Title Companies and Buyers

• Underinsured HOAs may leave owners exposed to repair costs
• Ambiguous coverage can lead to disputes after damage or accidents
• Lender requirements may not be met, delaying closings
• Buyers may unknowingly skip necessary personal insurance

How Title Companies Can Help

Using COCRS, title professionals can:

• Request HOA insurance certificates and policies
• Verify coverage limits and exclusions
• Check for recent claims or lapses in coverage
• Include insurance summaries in title commitments
• Educate buyers and agents on what’s covered—and what’s not

How COCRS Supports This Process

COCRS simplifies insurance verification by:

• Retrieving full insurance documents from HOAs
• Providing contact reports to clarify coverage details
• Offering status letters that confirm current policies and claims

Conclusion

HOA insurance is more than a formality—it’s a safeguard for buyers and a risk factor for closings. Title companies that proactively verify coverage using COCRS can protect clients, reduce liability, and enhance their reputation as thorough professionals.