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Insurers eye HOA growth as community risks expand
HOAs account for roughly a third of U.S. housing market activity, with about 373,000 associations and growth of around 5,000 new ones per year, adding more exposure for pool safety and security-related contracts.
Homeowners associations are now a major part of the American residential landscape, with about 373,000 associations across the country housing an estimated 77 million people, according to Risk & Insurance. The outlet says HOAs represent roughly a third of the U.S. housing market and are expanding by about 5,000 new associations each year.
As the HOA segment grows, insurers face an increasingly complex risk mix, ranging from common-area safety issues such as slips and falls to evolving security needs that can include armed security contracts. Risk & Insurance also notes that associations vary widely in size, structure, and amenities, and that resident expectations and community events are becoming more elaborate.
Risk & Insurance describes PHLY’s view that the HOA category includes community owner associations, property owners associations, master associations over sub-associations, and some commercial HOA structures such as strip malls and planned unit developments. The piece says PHLY’s underwriting fundamentals include an operating board, established CC&Rs, and proper registration as an association.
Risk & Insurance says PHLY focuses its HOA product on common areas including clubhouses, fitness facilities, tennis courts, pools, and other amenity infrastructure, with residential building coverage also mentioned. The outlet also quotes PHLY vice president Nicole Reed, who said it is a profitable line they want to write more of, while acknowledging “GL” challenges tied to slips and falls.