How does an HOA board buy crime or fidelity insurance, and how much coverage do we need?

By OurHOA · General information · Revised November 8, 2026

How an HOA board buys crime or fidelity insurance: the TX, FL and CO rules, a worksheet for the coverage limit, who must be covered, and what to do after a theft.

Part of the HOA board handbook: vendors, projects and upkeep.

The short answer

Crime insurance, still called a fidelity bond by many declarations and statutes, pays the association back when someone with access to its money steals it. Buy it in the association's name, cover every director, officer, volunteer and manager who can touch the accounts, and set the limit at the most money that could be gone before anyone noticed, which for most HOAs means the reserve balance plus a few months of dues. Check three places before you shop: your state statute, your declaration and bylaws, and, for a condominium, the lender rules that decide whether buyers can get a loan. A small HOA can usually add the policy through the agent who already writes its property and liability package. Requirements vary by state and by your governing documents. This guide is education, not legal or insurance advice.

What the law and lenders require

Florida: section 720.3033(5) requires an HOA to keep insurance or a fidelity bond for everyone who controls or disburses its funds, which the statute says includes check signers and the president, secretary and treasurer. The coverage must equal the maximum funds in the custody of the association or its manager at any one time. Owners can waive it, but only by a majority of the voting interests present at a properly called meeting, and the waiver must be approved again every year. Colorado: C.R.S. 38-33.3-313(10) requires an association with 30 or more units to carry fidelity insurance, to the extent reasonably available, whenever an owner or employee controls or disburses funds. The floor is two months of current assessments plus reserves, calculated from the current budget. Subsection (11) makes a contract manager carry the same amount unless the association's policy names the manager as an insured employee, and subsection (12) lets the board require more. Texas: Property Code chapter 209 sets no fidelity requirement for HOAs. Condominium associations get the power to buy fidelity bonds under section 82.102(a)(18), but no mandate. In Texas, the declaration, bylaws or a management contract is usually what requires the policy, so read them. Lenders: Fannie Mae's Selling Guide (B7-4-02) requires fidelity or crime coverage for condo and co-op projects, with exceptions that include projects of 20 units or fewer and projects whose required coverage would be $5,000 or less. Where a state sets its own fidelity requirement, Fannie Mae accepts that instead.

Work out the limit with real numbers

Do this on one page and put it in the board packet. Take a 90-home HOA with dues of $150 a month and $160,000 in reserves. 1. Monthly assessments: 90 x $150 = $13,500. 2. Highest operating balance in the last 12 months, from the bank statements: say $52,000, the week after January dues came in. 3. Reserve balance today, plus what the budget will add this year: $160,000 now, about $185,000 by year end. 4. Any money the manager or a title company holds for you at any point. The Colorado floor is two months of assessments plus reserves: $27,000 + $160,000 = $187,000. The Florida test is the most money in custody at one time: $52,000 + $185,000 = $237,000. For a condo selling to Fannie Mae borrowers, the Selling Guide allows three months of assessments, $40,500 here, if the association follows at least one listed control: separate operating and reserve accounts with statements sent directly to the association, a manager with no authority to move reserve funds, or two directors signing every reserve check. Without one of those controls, the requirement is the maximum funds in custody. Round up to the next common limit, here $250,000, and write the date and the numbers on the worksheet. Repeat it before every renewal. Reserves grow every year, and a limit set when the reserve fund was half its size quietly falls behind the statute.

Make sure the right people are covered

Think about everyone who can move money: a treasurer, a manager's bookkeeper, a volunteer who collects pool fees. Ask the agent to show you, in the policy wording, that each of these counts as a covered person: - Every director and officer, whether paid or not. - Committee members and volunteers who handle cash, checks or online banking. - The management company and its staff, if you have one. - Any bookkeeper or accounting service with access to the accounts. The manager matters most. In Colorado, an association with 30 or more units that hands collection or disbursement to a manager must have bylaws requiring the manager to carry a fidelity bond of at least $50,000, or more if the board sets it (38-33.3-306(3)(a)(I)). Fannie Mae says the association's own policy must cover the management agent, and a policy the manager buys in its own name is not an acceptable substitute for condo lending. Ask the manager for its certificate anyway, and keep both. Self-managed HOAs should think about the volunteer who will replace the current treasurer, since a policy that covers only listed names leaves a gap the day the officers change.

Read the policy for the losses boards actually have

A treasurer writing checks to themselves is the loss everyone pictures. Outside fraud can be just as costly: a fake email from the landscaper asking for new bank details, a check stolen from the mail and washed, a login taken over. Ask these questions about each quote and write the answers on the worksheet: - Does the policy cover employee theft, forgery or alteration of checks, and computer or funds transfer fraud? Each is often a separate insuring agreement. - Is there a social engineering or fraudulent instruction endorsement, and what is its sublimit? Without it, a payment a director sent on purpose to a fake account may not be covered. - What is the deductible? A $5,000 deductible on a policy for a 40-home HOA can wipe out most of a typical loss. - Does the policy cover losses discovered during the policy period even if the theft started earlier, and does it carry over prior coverage when you change carriers? - How quickly must the association give notice of a loss and file proof of loss? - Are any controls conditions of coverage? If the application says two signatures are required and the bank account allows one, fix the account or fix the answer before you sign. Our guide on cyber insurance for an HOA explains where crime coverage ends and cyber coverage begins, which matters most for wire fraud.

A buying timeline and a motion

90 days before renewal: the treasurer updates the limit worksheet and pulls the declaration, bylaws and any management contract clause on bonds. 60 days before: the agent markets the crime coverage with the rest of the package. Ask for at least two quotes if the current carrier's limit is below the worksheet number. 30 days before: the board compares the quotes at a noticed meeting, with the answers to the policy questions above. 10 days before: bind the policy, confirm the association is the named insured, and file the declarations page and full policy in the records. Motion: "I move that the board purchase crime coverage from [carrier] through [agency] for [dates], with an employee theft limit of $[amount], covering directors, officers, volunteers and the management agent, a social engineering sublimit of $[amount] and a deductible of $[amount], at an annual premium of $[amount], as recommended in the treasurer's worksheet dated [date]." Florida boards: do not put the annual waiver on the meeting agenda to save the premium. The savings are small, and the board is the group left explaining an uninsured theft.

If money goes missing

Call the bank the same day to stop payments and lock online access. Then give the carrier written notice through the agent, even before you know the amount, since policies set notice deadlines and a late notice can cost the association the claim. Preserve bank statements, emails, check images and the general ledger, and stop anyone under suspicion from deleting or editing records. File a police report, which the carrier may ask to see. Do not sign a repayment agreement with the person who took the money until the carrier and an attorney have seen it, because the carrier may want to pursue that person itself. Tell owners what happened once you have the facts, without naming anyone before charges or a finding. Our guide on how to protect HOA bank accounts from fraud covers the controls to tighten afterward.

Mistakes boards make

- Buying a limit equal to one year's dues and never raising it as reserves grow. - Assuming the manager's own bond protects the association. - Covering only named officers, so a new treasurer elected in March is not covered until someone calls the agent. - Skipping the social engineering endorsement because the treasurer "would never fall for that." - Filing the declarations page but not the full policy, so nobody can check the notice deadline when it matters. - Answering application questions about controls the association does not actually follow. - Using a Florida owner waiver year after year without anyone checking whether the board still wants it.

Sources

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.

More on dues & money

Or browse all hoa dues, fees & money guides.