When disaster strikes a community—whether it’s water damage from a burst pipe, a fire in a condo unit, or a storm that tears through a property—community association managers are often the first line of defense. Navigating the insurance claim process is one of the most critical responsibilities of a manager, and doing it right protects the association’s finances, reputation, and residents’ peace of mind.
In this article, we’ll cover the essential steps for handling insurance claims in HOAs and condominiums and why a catastrophic loss plan is key to protecting your community when the unexpected happens.
Why Insurance Knowledge Is Essential for Community Association Managers
Insurance coverage in HOAs and condos is complex. Unlike single-family homes, community properties involve shared walls, common elements, and overlapping responsibilities between the association’s master policy and individual owners’ HO-6 policies.
As a manager, you need to:
- Understand your governing documents and insurance provisions.
- Communicate clearly with the Board and residents.
- Track every step of the claim process to closure.
- Prepare for catastrophic events that could cripple the community without a plan.
The Core Steps of Handling an Insurance Claim
1. Review Governing Documents and Policies
Before damage occurs, familiarize yourself with the association’s insurance declarations, bylaws, and coverage details. This clarifies what the association master policy covers (e.g., roofs, exterior walls, common areas) versus what unit owners must cover individually.
2. Establish Vendor and Adjuster Relationships in Advance
When a water main breaks or fire damage spreads, you won’t have time to shop around for restoration vendors. Build a list of trusted vendors and restoration companies who understand HOA and condo structures, and make sure you know the adjuster assigned to your property.
3. Document Damage Immediately
Photos, videos, receipts, and detailed incident reports should be logged from day one. A well-documented claim helps avoid disputes and speeds up the insurance process.
4. Communicate Clearly With Homeowners
Owners often assume the association’s insurance covers everything, which is rarely the case. Explain what’s happening with the claim, what the deductible is, and when they should contact their HO-6 provider. Frequent updates prevent confusion and mistrust.
5. Understand Deductibles and Special Assessments
High-rise and large-scale communities often have six-figure deductibles. Be ready to explain how deductibles are applied, whether responsibility can be allocated to the unit of origin, or if a special assessment is needed.
The Role of a Catastrophic Loss Plan
While day-to-day claims are common, every association must be prepared for a catastrophic event—a fire, hurricane, tornado, or flood that impacts large portions of the property.
A catastrophic loss plan provides a roadmap for Board members, managers, and residents when disaster strikes. It should include:
- Emergency Contacts: Pre-vetted restoration companies, legal counsel, and insurance adjusters.
- Communication Plan: How the Board and manager will issue timely updates to residents.
- Financial Planning: Reserve strategies, deductible coverage options, and funding sources for uncovered expenses.
- Operational Continuity: Steps for keeping essential services running (water, electricity, elevators, access control) during a crisis.
- Post-Event Review: A system for evaluating the effectiveness of the response and improving the plan for the future.
Having a catastrophic plan in place not only protects the community but also reassures residents that leadership is prepared.
Key Takeaways for Managers
- Be proactive: Know your policies, vendors, and governing documents before disaster strikes.
- Document everything: Strong records make for stronger claims.
- Communicate constantly: Owners will trust the process if they’re kept informed.
- Plan for the worst: A catastrophic loss plan isn’t optional—it’s essential.
Final Thought
Navigating insurance claims in HOAs and condominiums isn’t just about filing paperwork. It’s about protecting the financial health of the community and maintaining resident confidence. With preparation, documentation, and a catastrophic loss plan, community association managers can guide their communities through both everyday incidents and major disasters with professionalism and resilience.