How do I know if our HOA is underinsured – and how often should coverage be reviewed?

Underinsurance is the single most common problem we identify when reviewing HOA policies — and it’s almost always invisible until a major claim is filed. Common warning signs include:

• Your replacement cost valuation hasn’t been updated in 2+ years
• Your policy was written without a professional appraisal
• Your insured value seems low relative to what comparable construction costs today
• Your policy uses an Agreed Value rather than a Replacement Cost Endorsement
• Your agent doesn’t specialize in HOA insurance

Construction costs in Tennessee have risen 30–50% since 2020. An HOA that was fully covered at policy inception may now face a significant coinsurance penalty at claim time — meaning the insurer will only pay a proportional share of the loss, leaving your association with a devastating out-of-pocket shortfall.

We recommend a formal coverage review at every renewal, and a professional replacement cost appraisal every 3–5 years. For communities in high-growth construction markets or those that have made significant improvements, more frequent reviews are warranted. Call us at 423-709-9010 — we offer complimentary coverage audits for Tennessee HOAs.