Texas Property Owners’ Associations, or POAs, will often have to deal with different types of insurance coverage.
Likewise, condominium associations and subdivisions with an HOA may also have to deal with different insurance companies from time to time.
- The board of a POA or HOA will often have property and liability coverage in place for the common elements on the property in case of damage or destruction.
- The board and leadership may also have Directors and Officers, or D&O coverage. This type of insurance protects individual members of the board and any officers from having to pay a liability claim if a resident or other person accuses them of negligence or misconduct while performing their duties. This coverage also reimburses the HOA or POA if they must defend or protect one of their leaders from such a claim.
- Especially as they acquire land to develop a subdivision, those trying to create a community subject to a POA or HOA may purchase title insurance. Title insurance offers financial protection if it turns out that there is a defect in title, like a lien, an easement or a competing claim, on the land being developed.
An HOA or POA should understand their options in an insurance dispute
No one ever wants to have to submit an insurance claim. Over time though, the chances an HOA or POA will have to work with an insurance company to secure a legal defense or to get paid for a loss that otherwise residents would have to cover as an assessment.
Sometimes, the process of securing coverage is not easy. Insurance companies may deny what the POA sees as a valid claim or may offer a payment much less than the amount lost.
Insurance companies must honor their contractual obligations. There are also other Texas laws which protect policyholders from aggressive tactics by insurance carriers.
An HOA or POA in the greater Houston area that has a dispute with their insurance carrier should evaluate their options.