July 14, 2025 | Mark Luis Foster

Imagine for a moment that you could buy insurance to protect yourself against an unexpected assessment levied by an HOA. I mean, why not? You can buy insurance for nearly everything, including your fluffy pets, so it was inevitable that someone create a business to protect against what seems to be an inevitable expense.

There are more than 360,000 HOAs in the USA, and many of them are suffering from a lack of reserve funding. As we blogged about HERE, there are only 12 states that require reserve funding, and even then, the amounts are not well regulated in terms of what needs to be set aside for future expense. That means that HOAs that need an emergency repair, re-roof, new street, etc., can often blindside residents when a special assessment is needed in order to raise the necessary funds.

Now the market has HOA Warranty, a new business available in some states (not Minnesota), which protects against unexpected HOA special assessments for new homeowners. For the low cost of $800 for a three-year warranty, homeowners can take out this insurance to ward off any assessment that is a result of a lack of funding available for repairs or upgrades. This service can be offered by sellers as peace of mind for incoming HOA residents.

The new firm offers several options. According to RealEstateNews.com:

HOA Warranty offers coverage options that include one- to three-year policies that range in cost from $380 to $800. Each covers up to $10,000 for a one-time event. For sellers, this may eliminate the need to place $10,000 in escrow for one or two years to facilitate a sale.

Seems like an interesting model. While the business is not yet available in our state, it will interesting to watch if other potential similar offerings pop up among providers.

Read the whole article HERE.