Does an HOA have to have insurance?
Reviewed by the OurHOA team · Updated June 2026
Whether an HOA is required to carry insurance - what the governing documents and state law mandate, why lenders force coverage anyway, and the policies a board should hold.
Usually yes - the question is who requires it
For all practical purposes a functioning association has to carry insurance, but the requirement comes from several directions rather than one universal law. Three things drive it: the community's own governing documents (which almost always obligate the board to insure the common property), state statutes (which often mandate coverage outright for condominiums and sometimes for planned communities), and the secondary mortgage market (which won't let owners get conventional loans in an uninsured community). Even in the rare case where none of those applied, a board that left the association uninsured would be exposing itself and every owner to ruinous liability - so in practice the answer is yes, and the real questions are how much and what kind.
What the governing documents require
Start with your CC&Rs and bylaws, because they are usually the most specific source. The declaration for a condominium or planned community typically directs the board to obtain and maintain property insurance on the common elements and general liability coverage, and frequently names minimum limits or specific policy types. This is a duty, not an option - a board that ignores an insurance mandate in its own declaration is breaching the governing documents and the directors' fiduciary obligations. The documents also draw the line between what the association insures (commonly the structures and shared areas) and what each owner must insure themselves; our guide on what HOA insurance covers walks through where the master policy stops and your own policy begins.
State law often mandates it - especially for condos
Many states require associations to carry insurance by statute, and condominiums are regulated most heavily. Florida, for example, requires a condominium association to use its best efforts to obtain and maintain adequate property insurance on the common elements and association property (Fla. Stat. 718.111(11)). California requires associations to carry a fidelity bond or crime insurance covering the people who handle association funds (Cal. Civ. Code 5806). Other states address insurance through their condominium or common-interest-ownership acts and through the planned-community statutes; the exact mandate, minimum limits, and whether it reaches single-family-home HOAs vary, so the specifics depend on your state and your type of community.
Lenders force coverage even where the law is silent
Even if no statute compelled it, the mortgage market effectively would. Secondary-market guidelines from Fannie Mae and Freddie Mac - the entities that buy most conventional loans - require a condo or HOA project to carry adequate property and liability coverage (and, for condos, a fidelity bond) before lenders will write loans there, and FHA has its own project-approval insurance requirements. If an association lets its coverage lapse or falls short of those standards, buyers in the community can struggle to get financing and existing owners can find it harder to sell or refinance. That market pressure is often a stronger day-to-day enforcer of the insurance requirement than the statute itself.
The coverage a board should actually carry
Meeting the requirement usually means a stack of policies, not one. The core pieces are property insurance on the buildings and common elements, commercial general liability for injuries on common property, and directors-and-officers (D&O) coverage that protects volunteer board members from personal exposure when they're sued over a decision. Most boards also carry a fidelity bond or crime policy against theft of association funds - the subject of our guide on the HOA fidelity bond and embezzlement protection - and many add an umbrella policy for catastrophic claims. What's legally required varies, but a board insuring only the buildings and skipping liability or D&O is leaving the community and its directors badly exposed.
What happens if the HOA is uninsured or underinsured
An association that is uninsured or carries too little coverage doesn't make the risk disappear - it shifts it onto the owners. A large uncovered loss or liability judgment that the reserves can't absorb typically becomes a special assessment split among every home, which is exactly the kind of surprise bill our guide on special assessments describes. Underinsurance shows up another way too: when a covered claim falls short, the master-policy deductible and any shortfall can be passed to owners as a deductible assessment. And directors who failed to insure as the documents or law required can find their own liability shield weakened. Adequate coverage is far cheaper than the assessments that follow going without it.
How OurHOA helps
Staying properly insured is partly a tracking problem - knowing which policies are in force, when they renew, what the limits are, and that the premiums are budgeted and paid. OurHOA gives a self-managed community one place to keep its key documents and financial records, so the board can see its policies and renewal dates in one spot and budget reserve and operating dollars for premiums instead of discovering a lapse after a loss. That keeps a small volunteer board on top of coverage it's required to maintain. OurHOA is software for keeping a community organized, not an insurance agency or a law firm - for exactly what your state and governing documents require you to carry and in what amounts, work with a licensed insurance professional and review your declaration.
OurHOA is the friendly, affordable way self-managed communities keep dues, records, and reminders in one place. See how it works.
These guides are general education for HOA boards and residents, not legal, tax, or financial advice. Rules vary by state and by your community's governing documents - check with a professional for your situation.