Tennessee HOA Bond Requirement Guide & Calculator
Understand Tennessee Public Chapter 731 and estimate the coverage amount your association may need by January 1, 2027.
Free calculationNo email requiredImmediate results
Start with your association’s figuresCoverage estimator
Calculate Your Estimated Coverage
What changed
A new Tennessee protection requirement
Beginning January 1, 2027, Tennessee homeowners’ associations and unit owners’ associations that collect assessments for common expenses must obtain and maintain this protection.
Public Chapter 731 refers to this protection as a blanket fidelity bond or insurance policy. It is designed to protect the HOA against certain losses caused by theft or dishonesty involving officers, directors, employees, a managing agent, or employees of the managing agent.
The board of directors or managing agent may obtain the coverage on behalf of the association.
Read Tennessee Public Chapter 731Understanding the formula
How Your Coverage Amount Is Determined
Reserve Balances
The association’s current reserve funds. This amount can usually be found on the HOA’s balance sheet, financial statement, or reserve-account statement.
Annual Assessment Income
The total assessments the association expects to collect from all units or homes during one year—not the amount paid by a single homeowner.
Required Calculation
Current reserve balances plus 25% of the association’s aggregate annual assessment income.
Reserve Balances + 25% of Annual Assessment Income
Minimum Coverage
Public Chapter 731 establishes a minimum coverage amount of $10,000, even when the formula produces a lower amount.
Calculation Example
Example: An HOA with $20,000 in reserves and $40,000 in annual assessment income would calculate its estimated coverage as follows:
$20,000 in reserves + $10,000, representing 25% of annual assessments = $30,000 in estimated coverage.
Personal guidance
Work Directly With Antoine
Antoine L. Sherman, Sr.
Owner | Licensed Insurance Agent
Insured By Antoine LLC
Receive personal guidance from a licensed insurance professional who can review your association’s figures, explain the next steps, and help determine whether the available coverage meets your association’s needs.
Request a review
Let’s Turn Your Estimate Into a Quote
Your calculator result is a starting point. Submit a few details below, and Antoine will review your association’s information and contact you regarding the next steps.
Your suggested quote-request amount
Complete the calculator above
A clear process
What Happens Next
- 1
Submit your association’s information.
- 2
Antoine reviews the calculation and association details.
- 3
Antoine contacts you for any remaining information.
- 4
The request is presented to an appropriate bond market for review.
Helpful answers
Frequently Asked Questions
Who must obtain this coverage?+
The requirement applies to Tennessee homeowners’ associations and unit owners’ associations collecting assessments for common expenses.
When does the requirement take effect?+
January 1, 2027.
What should I enter if the HOA has no reserves?+
Enter $0 for the current reserve balance. The calculator will still apply 25% of aggregate annual assessment income and the statutory $10,000 minimum.
Is the calculated amount the cost of the bond?+
No. It is an estimated coverage amount, not the premium or price of the bond.
What if the HOA already has crime or fidelity coverage?+
An existing crime or fidelity policy may provide some or all of the required protection, but it should be reviewed to confirm that the coverage limit, covered individuals, terms, and policy form satisfy the new requirement.
Can a property-management company obtain the coverage?+
Public Chapter 731 allows the board of directors or managing agent to obtain the bond or insurance coverage on behalf of the HOA.