Is It Time to Review Your HOA’s Insurance Policy?

Insurance is not a nice to have for your HOA, it’s a need to have, and it’s a big line item on your association budget. Regularly reviewing your insurance policy is an important step to ensure you’re maintaining the coverage levels you need at a cost that works for your association. 

When to Review Insurance Coverage

Chicago condo associations are required by state law to maintain several types of insurance. Section 12 of the Illinois Condominium Property Act (765 ILCS 605/12) explains state requirements, but individual associations may also have their own rules related to insurance. Always refer to your governing documents before embarking on an insurance review.

At a minimum, condo associations should review their insurance coverage at least once a year, but there’s never a bad time to shop around for new insurance. 

For some HOAs, an opportune time for the board to review the association’s insurance policies is during the annual budget planning process. Others choose to put an insurance review on the agenda for another time of year. If your association has recently completed a major upgrade to your property, that’s also a good time to review coverage.

What Types of Insurance Does a Chicago Condo Association Need?

Illinois condo associations are required to hold general liability property and regular liability insurance. General liability property insurance covers the buildings themselves. This is the most important insurance any HOA will carry, and the one that will incur the most expense. They also must carry fidelity bond/crime insurance, D&O coverage, workers’ compensation coverage, and potentially other insurance depending on their association.

To learn more about the types of insurance policies your HOA should have, be sure to read this post.

Routinely reviewing your association’s insurance policies is important for budgeting as well as ensuring you have adequate protection. Work with your association management company and insurance broker to discuss the essential coverage types and policies you need to protect your condo association. For additional questions about condo management in Chicago, contact our team at First Community Management. 

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