By Chris Drake, Drake Law, PLLC

Many HOA boards discover too late that insurance is not designed to pay for aging roofs, deteriorating plumbing, or neglected building systems. Understanding the difference between maintenance and covered loss can prevent major financial surprises for community associations.

“Insurance protects against sudden events—not the predictable consequences of aging buildings.”

BOARD TAKEAWAYS • Insurance covers sudden and accidental damage, not gradual deterioration. • Aging roofs, plumbing corrosion, and worn building systems are maintenance issues. • Deferred maintenance can lead to denied claims and costly special assessments. • Preventative maintenance and reserve planning reduce financial risk for communities.

COMMON CLAIM DENIAL SCENARIOS FOR HOAs • Aging roofs leaking due to wear and tear • Long-term plumbing leaks caused by corrosion • Electrical failures tied to outdated panels • Water intrusion from deteriorated flashing or sealants • Structural damage caused by years of deferred maintenance

One of the most common misunderstandings among homeowners and condominium associations is the role insurance plays in protecting property. Many property owners assume that if something breaks, deteriorates, or fails, the association’s insurance policy will cover the cost of repair or replacement. In reality, insurance is not designed to serve as a maintenance plan. Rather, it is intended to cover sudden, accidental, and fortuitous losses—not the predictable consequences of neglect or deferred maintenance.

For homeowners’ associations (HOAs), this distinction is particularly important because HOAs are responsible for maintaining common elements such as roofs, exterior walls, plumbing systems, and shared mechanical components. When these systems deteriorate over time and eventually fail, the resulting damage is often not covered by insurance. This can leave associations and property owners facing significant unexpected costs.

Insurance policies are built around the concept of fortuity. In simple terms, insurance protects against events that are unexpected and accidental such as hailstorms, fires, sudden pipe bursts, or wind damage that causes immediate harm to property.

Maintenance issues, however, are fundamentally different. Roofs age. Plumbing corrodes. Sealants deteriorate. Electrical systems become outdated. When property components fail due to wear, deterioration, or lack of upkeep, insurers typically deny coverage because the loss was not accidental; it was the predictable result of aging or neglect.

Most property insurance policies include exclusions for wear and tear, deterioration, rust, corrosion, and continuous or repeated seepage or leakage of water over time. Coverage is triggered by a sudden event, not the gradual failure of a system that should have been inspected, maintained, or replaced earlier.

For HOAs, the implications are significant. Associations are charged with maintaining common elements and protecting the structural integrity of the community. Deferred maintenance increases the likelihood of property damage and the risk that insurance coverage will be denied when problems eventually surface.

When claims are denied due to maintenance-related issues, the financial burden shifts to the association and its members, often resulting in unexpected special assessments and difficult decisions for community boards.

The most effective way to avoid these outcomes is proactive maintenance. Regular inspections, timely repairs, and proper budgeting for capital improvements help ensure that building systems remain functional and insurable.

Insurance remains an important safety net when genuine covered losses occur. But it is not a substitute for responsible property management.

When a Claim Is Denied

When an insurance claim is denied, particularly when the carrier attributes the damage to wear and tear, deterioration, or lack of maintenance, it is often worthwhile for associations to consult an attorney experienced in insurance coverage matters. In many situations, the true cause of the loss may involve a covered event, even if deterioration is also present. An experienced insurance lawyer can help evaluate the denial, review policy language, and determine whether the insurer properly investigated and applied the policy terms. Early legal guidance can make a meaningful difference in preserving coverage and protecting the financial interests of the community.

About Drake Law, PLLC

Drake Law, PLLC is a Colorado law firm focused on representing policyholders in property insurance disputes and bad faith claims. The firm works with homeowners, contractors, and community associations to navigate complex insurance claims, evaluate coverage issues, and ensure insurers honor their contractual obligations.