Want a Purple House? Better Ask the HOA, Lest You Lose Your Insurance

We recently ran across a news story out of Denver about a dispute between a homeowner and her homeowners’ association (HOA), over a particularly bright green paint. At the very end of the piece, the writer mentions that “the clock is ticking for [the homeowner] … who is in danger of losing her homeowner’s insurance. She has until the end of the month to get her house painted before her insurance is canceled.”

It may seem strange that a person could lose her homeowners’ insurance because of a poor paint choice, but it could conceivably happen. If you live in a condo, a multi-family home or a community where the HOA provides some level of insurance, and you are found in violation of an HOA regulation, that could affect your insurance policy. What we want to focus on here, though, is the importance of purchasing your own individual policy to protect you in the event of a problem.

HOA insurance and individual policies

More often than not, HOAs carry a master policy, often called a “walls out” or “studs out” policy, that can protect both the homeowner and the complex in the event of a fire or a storm (for example). The master policy would cover damage to things like:

• Foundations
• Elevators
• Stairs and stairwells
• Roofs
• Hallways
• Community areas (like the pool or clubhouse)
• Landscaping

The master policy is likely to exclude flood damage, because flood damage is often excluded from insurance policies.

Everything else – “walls in” – may not be covered, which leaves you on the hook for costs. For example, if a recent storm caused a leak in the roof, and rainwater damages the electrical wiring inside of your home, the HOA’s insurance should cover the costs associated with fixing the leak and the writing. But the toaster or microwave that shorts out as a result? That may not be covered by the HOA policy; you may need your own policy to collect for that type of damage. Insurance policies come in all shapes and colors, which is why it is important for you to have the right policy.

And if you do want to paint your house, make sure it is a color that your HOA will not object to you using.

At the Gilbert Firm, we understand that disputes often arise between homeowners and insurance companies. We understand the importance of identifying whose insurance is primary, and we know how to fight to protect our clients when they make claims for damage. To schedule a consultation with a Tennessee insurance dispute attorney like Clint Scott, Brandon McWherter or Jonathan Bobbitt, please call 888.9996.9731, or fill out our contact form. With offices serving Nashville, Chattanooga, Memphis, Jackson and Knoxville, we are always nearby when you need us.