Do You Need Homeowners Insurance If You Live In A Community With A Homeowner's Association?

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If you are getting ready to buy a house located in a community that has a homeowners association (HOA), you should be prepared to pay a monthly fee to the HOA. In addition to this, you will have to pay your mortgage payment and all your other bills. It's important to fully understand what bills you will have if you buy this particular house, and one of the questions you may have about your expenses is whether you will need homeowners insurance for your house. Here are two things you should know about this.

You Will Need Homeowners Insurance

The first thing to understand is that you will need to purchase homeowners insurance for your new house. If you take a loan to buy this house, your mortgage lender will require this. The policy you purchase will cover all the typical types of damage and losses you might experience with any house, but it will only cover the property you actually own.

For example, if the house you are buying is a condominium, townhouse, or any other type of multi-family property, you will actually only own the inside of your house. You will not own the exterior, the yard, or any of the community areas that you might be free to use.

Your homeowners insurance will protect you against fires, tornados, and other natural disasters that might cause damage to your home, and you should make sure you have a sufficient amount of coverage.

If the house is a multi-family unit, you may not need to purchase coverage to replace the exterior of the house if it is a complete loss, but you will need to make sure you have enough coverage to rebuild the entire inside of the house. You must also have enough coverage to pay for replacing all your personal items.

If you are not purchasing a multi-family unit, you should get enough coverage to cover replacing the entire home, inside and out. You should also have enough insurance to cover the loss of all your personal belongings.

What The HOA Fees Are For

Average HOA fees range from $200 to $400 per month, so if they do not cover insurance on your home, what are these fees for? HOA fees are used to pay for a variety of things, including insurance coverage, but the coverage provided through your HOA is different from the coverage provided through your homeowners insurance. The insurance coverage your HOA is responsible for may be designed to protect losses with the following:

• Exterior of homes if they are multi-family houses
• Damage caused in yards and roads in the community
• Common areas in the community, such as a swimming pool or clubhouse

The HOA must keep insurance coverage on all these things, and that is where part of your fees will go. In addition, the HOA will also use this money to pay for other things, including the following:

• Normal maintenance in the community, such as road repair, lawn maintenance, and snow removal
• Utilities in common areas and garbage pickup
• Major renovations needed in the future for the community

There are many different expenses the HOA will be responsible for, but you will also have expenses to pay. This includes your mortgage, HOA fees, and homeowners insurance. The average cost of a homeowners insurance policy is $952 per year, and it's important for you to figure this into your budget before buying a house.

After making an offer on the house you want to buy, you should call an insurance company that offers homeowners. You can ask them about possible discounts you are eligible for, and they will give you a quote to insure the house you are buying. For more information, contact a business such as Colling Insurance Services, Inc.

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29 July 2015