Determining Adequate Insurance Coverage for Your HOA’s Outdoor Natural Property

By: Jamie George, Vice President, Insurance, FirstService Financial


Choosing the right association insurance coverage can be a challenging task for board members. The board is responsible not only for securing adequate coverage to meet the requirements specified in their homeowners association’s governing documents, but also to sufficiently cover all claims in the event of a loss.

One line of coverage HOAs typically carry is property insurance to protect against loss of property that the association owns. Depending on the insurance carrier, property coverage sometimes includes a sublimit for damage to trees, shrubs and other natural outdoor property. All it takes is having one large tree downed in a windstorm to appreciate the importance of insurance coverage for outdoor natural property. If this isn’t included in your policy, or if it isn’t sufficient, you can pay an additional premium to add it or to increase the coverage amount.

HOAs should be aware of two potential caveats with this type of coverage, however. Depending on the insurance carrier and policy, it could include a limit per tree, sometimes as low as $500. In Nevada, where significant resources are allocated to landscaping, large palm trees like the Queen Palm or the Mexican Fan Palm can cost upwards of $2500 each. There are also a lot of insurance carriers that do not include wind coverage for trees, shrubs and outdoor natural property. Some carriers will add this coverage, via an endorsement, for an additional cost. 

It’s important to become familiar with your community’s outdoor natural property and its value since not having the proper coverage could expose the association to a significant loss. Board members don’t have to become arborists, but they would be wise to examine the cost of some of the community’s trees, shrubs and other perennial woody plants. Only then will they understand the importance of setting higher sublimits and purchasing additional coverage.

Every planned community or condominium cooperative faces liability exposures that could potentially shatter their financial stability. Therefore, it is vital to regularly review your community’s insurance policies to ensure you’re getting the best coverage and that the coverage is compliant with NRS 116, in addition to your CC&Rs (Covenants, Conditions and Restrictions).

A reputable community management company can assist large and small HOAs in finding intelligent, cost-effective approaches to their insurance needs. For additional insights, contact FirstService Residential, Nevada’s leading community management company.



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