HOA Fidelity Insurance Tips VIDEO

Hi everyone and welcome to my insurance website. Today I want to talk about HOA Fidelity Insurance for Home Owner Associations, and, share with you a new coverage that will be mandatory this January 1st, 2019

First let’s do a quick review, A Fidelity Policy protects your Association from embezzlement of funds by one of the board members, an association employee, or the Associations management firm. How much coverage should you have in your fidelity policy? The Davis-Sterling civil code, which is that part of the California civil code that regulates HOA’s in California,recommends having coverage equal to current reserves and three months of home owner dues. This is smart coverage to have and as you veteran Association Managers very well know,all of our associations have a fidelity policy today. What has changed however, is that an additional coverage requirement has now been added. 

What is that coverage?  It is called “Computer Fraud and Funds Transfer Fraud”.  It was added to California Assembly bill 2912 which passed in September 2018. Specifically, if a criminal were to use computers, the internet, servers, email, or a phony wire transfer, etc. to embezzle funds, AB2912 legally requires an association has to have coverage for this type of crime.


As many of you know, I’ve been selling and managing HOA insurance for years in California and I agree with the new requirements for two reasons.  First, the cost is minimal, I ran some numbers and to add this coverage or increase it, cost about $100 to $500 per year depending on the dollar amount, and two, cyber theft is on the rise and we all have a fiduciary duty to protect our Associations.  Once again the new coverage requirement is called “Computer Fraud and Funds Transfer Fraud” so board members make sure to add it, and, in the right dollar amount.   Don’t wait until renewal because AB2912 requires it in your HOA fidelity insurance policy on January 1st, 2019. 

Thank you everyone for watching.  Please call or email with any questions, and I hope this HOA Fidelity Insurance Tip helps you down the road. Also see another HOA insurance tip video on GRC here.