Most homeowners love the idea of having a swimming pool, athletic court or health club as part of their association's grounds because it adds value to their property and it gives them something fun to do throughout the year. But HOAs that offer these types of facilities may need to have supplemental or additional insurance to cover the potential hazards that come with deluxe amenities.
When it comes to potential high-risk amenities like pools and gyms, basic liability coverage just doesn't do the trick. All insurance policies are not created equal, and getting proper coverage for your association's amenities is crucial.
"One HOA's amenity may not increase their premium at all, whereas the same amenity would increase a premium in another HOA," says Cappy Stults of Allen & Stults Co. Inc., an insurance brokerage based in Hightstown. "For instance, a pond in an adult community might not be of concern for an insurance underwriter, but an identical pond in a non-age restricted association would increase their cost. If it was next to a playground, it might even constrict coverage availability."
The Deep End
The one amenity that is of most concern to insurers and which can raise an HOA's premiums the most significantly is the swimming pool. Since pools are also one of the most popular amenities, boards need to be aware of the insurance issues involved.
"Mostly we see pools as the biggest exposure, with or without lifeguards," says Vincent Hager, who specializes in community association insurance at JGS Insurance in Holmdel. "That has become a very big topic as of late, with so associations trying to cut back on their costs by having either no lifeguards, or hiring their own individual as a lifeguard. So you're picking up that additional exposure, where you would normally get risk transfer as additionally insured for that."