Property insurance covers buildings, structures and personal property owned by the association. This type of insurance typically includes common property, parkland, woods, open spaces, recreational facilities, buildings and sometimes portions of residential areas.
Property insurance provides protection for loss of or damage to community association property. A HOA needs to determine the areas to be insured and should have a professional appraisal done to determine the value of the property. Replacement cost plus coverage, which assures full value replacement, without regard to a coverage dollar limit and the actual cash value of the property is also a wise choice.
An open perils policy is preferable to a named perils policy because the coverage provided under the open perils policy is much broader. Under the named perils coverage, it is up to the association to prove the cause of loss is covered by the policy. With open perils policies, all causes of loss are covered, unless specifically excluded or limited, and the burden of proving that a cause of loss is not covered or limited rests with the insurer.
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