Category: Home Insurance

In today’s world, garages are for a lot more than parking cars. People across the country have turned their garages into gyms, bars, apartments, workshops, and more. The value of those garages can change completely with these upgrades. And if your garage is “detached” from your home, the limits of your coverage may not be we you need.

Buildings that are not attached directly to the primary structure (home or “dwelling”) on your property are typically covered on homeowners insurance policies. However, many policies cover detached structures with only a percentage of the value of your home. As an example, your home may be covered for $500,000, but your detached garage may only be covered for 10% of that value – or $50,000. That may seem like a significant amount, but consider a total loss claim scenario for your detached garage. If you’ve upgraded that structure with flooring, finishing, or maybe even a sink, wet bar, or full bathroom – $50,000 isn’t going to go very far with today’s cost of building materials and labor.

Additional coverage for “Other Structures” (also known as Coverage B) is typically available to add to homeowners policies. If not, sometimes standalone coverage called Detached Structure Insurance can be purchased. You should also keep in mind that if you store property for “business use” in your Other Structure (e.g. tools, inventory, shipping materials, etc.), it likely would not be covered on your personal policies if you had a loss.

Detached garages and other structures often have more coverage needs than their owners have considered. Contact Brandon Patterson at 865.453.1414 or email brandon@ownbyinsurance.com and he’ll be happy to discuss your property and provide you info on the coverage you need.

In our previous article on this subject, we discussed the concerns homeowners face as they share risk in a Homeowners’ Association (HOA). In this article, we’ll take a look at the concerns that those on the Board of an HOA should have as they consider their own liability.

Professional Liability – Making decisions for a group can result in unforeseen liability. As an elected or appointed HOA board member, you are taking on the burden of determining some of actions for your community. If one of those decisions has a negative result, you may potentially be included in litigation.  If so, who will defend you, and who will potentially help you with any resulting financial liability? These answers will typically be addressed in the articles, rules, and/or bylaws that govern the association. This can help indemnify HOA board members. In order to provide this indemnification, the association’s assets and/or a Directors & Officers (D&O) insurance policy should be in place as financial protection.

A D&O policy typically protects the HOA board members if a legal challenge arising from their decisions or actions in a board capacity. Some areas this may come into play include:

• Rules created by the Board
• Election disputes
• Actions taken by the Board such as evictions
• Demands for allocation of HOA resources
• Decisions on service providers and/or service offerings

There are often endorsements for D&O that may be included on package policies for an HOA. However, these may be insufficient when considering all the potential liabilities. A standalone D&O policy is often a more complete solution for protection, as it often addresses more coverage areas and may provide higher limits.

When making the decision to cover your HOA board with a D&O policy, talk with an insurance agent who has the experience and market options to adequately address your group’s needs. If you need a place to start, please reach out to Brandon Patterson at 865.453.1414 or brandon@ownbyinsurance.com for more information.

Chances are, if you live in a neighborhood or a condominium, or even if you own a timeshare or cooperative, there is a group that oversees the standards and covenant of that community. General known as homeowners associations (HOAs), this group may provide benefits such as common space and community upkeep, neighborhood events, shared amenities, and group guidelines. You likely pay dues to be part of this group, and you probably agreed to abide by the guidelines when you moved into the home. But with those benefits also comes some liabilities. Who is protecting you and your neighbors from those risks? Here are some of the most common:

Common Space Liability – If you share a common space with your neighbors, whether it be a dog park, greenway, playground, picnic area, or more, there may be shared liability for injuries that occur in those spaces.

Shared Property Damage – If your neighborhood or condo shares property or a building(s), an HOA policy may cover property damage to that shared risk should it occur. For example, if a fire destroys the community’s gym, an HOA policy would likely come into play for recovering on a claim.

These HOA policies are also called master policies, and there are different types commonly found. For single-home neighborhoods or subdivisions, the master policy typically does not extend the homeowners coverage, but rather covers the common areas and shared liability only. For condos, there are typically three types of master policies:

Bare Walls Coverage – Typically covers the basic structure of the condo.

Single Entity Coverage – Typically covers the basic structure plus entire walls, cabinets, and fixtures.

All-in Coverage – Typically covers everything a single-entity master policy covers, but also extends to built-in appliances.

It’s also important to note that with a master HOA policy, the adjusting of claims is based off how the master deed and bylaws of the association are written. Members of the HOA should read these very carefully to be sure that their individual units are insured correctly.

In addition to these coverages, there is liability for the Board of the HOA and other risks that may need to be addressed. We’ll review those in a future article, but if you need to learn more about HOA risks and policies, please contact our specialist Brandon Patterson at 865-453-1414.