Chris Fantaski Explains COAs vs. HOAs

Posted November 20, 2024

Author – Chris Fantaski, CLCS, CISR Elite, CPIA, Account Advisor – Horst Insurance

Homeowners should learn about the differences between Condominium Associations versus Homeowners’ Associations before they move forward with their home purchase. Association communities have become more common and are being constructed in many residential areas. Often, there is confusion over the differences between COAs and HOAs. One of the biggest distinctions between condominium associations and homeowners’ associations is the scope of ownership. The difference is in what the individual members of an association actually own.

With a condominium association, each member owns their own individual unit but have joint ownership in common areas. The primary responsibilities of a condominium association include maintaining the exterior of the buildings and common areas, managing shared spaces such as clubhouses and recreation facilities, and ensuring the overall upkeep of the property. Condominium owners are usually responsible for the interior of their unit and their personal property. Condominium unit owners, along with their personal insurance agents are playing close attention to the wording in the association documents regarding what type of coverage the condominium association provides for the units themselves. The condominium documents will state whether the association carries “all-in” coverage, which covers the fixtures like carpet, lighting, cabinets, etc. Or, if the association carriers “bare-walls” coverage, that does not cover anything inside the bare walls of the unit. When purchasing a unit within a condominium association, you will be provided a copy of the documents that provide you with all of the association information.

With a homeowner’s association, each member owns their individual home and their lot. Common areas are owned by the homeowner’s association itself. The primary responsibilities of a homeowner’s association are enforcing community rules, maintaining common areas, and managing community amenities such as pools, playgrounds and clubhouses. Unit owners within a homeowner’s association are responsible for obtaining their own insurance coverage on their homes and personal property, usually through a HO-6 personal insurance policy. When purchasing a home within a homeowner’s association, you will be provided a copy of the documents that provide you with all of the association information.

What you own with each type of unit are what distinguishes a condominium association from a homeowner’s association. It is a good idea to consult a licensed insurance professional to help interpret what you are responsible for insuring.