CONDO OWNERSHIP
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Most buyers receive the master policy as a one-page certificate of insurance two days before closing, glance at the coverage number, and file it. That page is a summary written by a broker. The document that decides who pays to replace your kitchen cabinets is the declarations page behind it, and it is usually three to six pages of small type that nobody in the transaction is assigned to read.
This is a reading guide for that document. What a master policy is, how it sits next to your own HO-6, and why the three coverage structures exist are covered in our overview of condo association insurance. What follows goes into the policy itself: which fields matter, what the numbers on them mean, and where the gaps open.
Leevli EditorialLast updated 2026-09-17
The named insured on a master policy is the association, not you. That single fact drives several consequences owners find out about at the worst time.
Claims are reported by the association, and the association's board decides whether to file at all. A board sitting on a large loss history may choose to absorb a $40,000 loss rather than file and face a non-renewal, and if the damage is in your unit, that decision is not yours to make. Unit owners typically appear as additional insureds with respect to the common elements under standard association forms, which is a narrower position than being the named insured.
Your lender appears separately, through a mortgagee clause, which is why the servicer wants evidence of insurance every year whether or not you send it. And Fannie Mae draws one boundary that catches scattered-site and phased developments: unaffiliated projects may not share a master property insurance policy. A shared policy is acceptable only where each project has a dedicated coverage amount, independently sufficient and insulated from what the other projects do.
The three labels are common shorthand. The trap is that the label on a broker's summary is not authority for anything. The recorded declaration is the document that allocates responsibility between the association and the owner, and the insurance policy is supposed to follow it. When they disagree, you have a gap that neither policy pays.
Washington State's Office of the Insurance Commissioner describes the three arrangements about as clearly as any public source. Under an all-in approach the master covers the exterior plus interior finishes: doors, windows, siding, shower and tub, vanity and cabinets, paint, baseboards and trim, light fixtures, floor coverings. Under all-in excluding improvements or betterments, often marketed as single entity, the association covers the original finishes only and not any change or upgrade the owner made: swap laminate counters for granite and the granite is yours to insure. Under bare walls or walls out, the master covers damage up to the uncovered sheetrock and subfloor, plus the roof, windows, fencing and hallway carpet, and every interior finish is the owner's.
To determine which one governs your unit, do this in order:
Boards are not always aware of the mismatch. Insurance brokers change, policies get remarketed on price, and nobody re-reads a declaration recorded in 1998. The project's recorded documents are the control copy, and the deeds and documents side of Leevli is where that reading should start.
Fannie Mae requires that master property insurance equal at least 100% of the estimated replacement cost value of the project improvements, including common elements and residential structures. Acceptable ways to evidence that figure include guaranteed replacement cost coverage, extended replacement cost coverage, a replacement cost value estimate from the insurer, an insurance risk appraisal, or a statement from a qualified professional.
What to check: when was that valuation last refreshed? Construction costs moved sharply in the first half of this decade, and a limit set on a 2019 appraisal can be materially short on a 2026 rebuild. A building insured at 100% of a stale number is insured at well under 100% of today's cost. This is also one of the quieter reasons dues rise, which we unpack in what really drives HOA fees.
Fannie Mae caps the master property deductible at 5% of the coverage amount per occurrence. Separately, where the policy carries a per-unit deductible, that deductible may not exceed $50,000 per unit.
Run the first number on a real building. A tower insured at $60 million with a 5% per-occurrence deductible absorbs $3 million before the carrier pays a dollar. That money comes from reserves, or from owners. The deductible is not a technicality; on a large loss it is frequently the largest single number in the whole transaction.
The second shape matters differently. A per-unit deductible is the amount charged against each damaged unit rather than against the building as a whole, and it lands directly on individual owners.
Three fields worth locating even though no agency rule turns on them. A coinsurance clause penalizes a claim when the building is insured below a stated percentage of value; an agreed value provision suspends that penalty in exchange for documented valuation. Ordinance or law coverage pays the extra cost of rebuilding to current code. In older buildings in jurisdictions that have tightened structural, elevator, life-safety or wind codes, the gap between what stood there and what code now requires can run into seven figures. If the declarations page shows ordinance or law at a token limit, ask the board why.
This is the connection most owners miss. Fannie Mae requires an individual unit owner policy when either of two things is true: any portion of the interior of the unit or improvements to the unit are not covered by the master policy, or the master policy includes a per unit deductible.
And the required amount is the greater of an amount sufficient to restore the unit to its condition before the loss, or the per-unit deductible itself. The allowable deductible on that unit owner policy is the greater of 5% of the coverage amount or $2,500, and the policy must be written on a special coverage form, or equivalent, on a replacement cost basis.
Read plainly: a $25,000 per-unit deductible on the master is a $25,000 minimum floor on your own building coverage, imposed by your lender, regardless of what your agent quoted you. Getting that number right is its own exercise, and sizing an HO-6 against a specific master policy is where it belongs.
This is the coverage that protects association funds from theft, and it is the one most often missing in small and self-managed buildings. Fannie Mae requires it for condo and co-op projects with three exceptions: projects qualifying for a waiver of project review, projects with 20 units or less, and projects where the required coverage would be $5,000 or less.
The required amount depends on financial controls. Where adequate controls are in place, the coverage must equal the sum of three months of assessments on all units in the project. Where they are not, it must equal the maximum funds in the custody of the association or its management agent at any time. Qualifying controls include separate working and reserve bank accounts with statements sent directly to the association, a management company that keeps separate records per entity and has no authority to draw on reserves, and a two-signature requirement on reserve account checks.
Two details worth repeating to a board. The coverage must extend to anyone who handles or is responsible for association funds, including the management agent. And a policy the management company maintains in its own name is not an acceptable substitute. The association itself must be the named insured, with premiums paid as a common expense.
General liability protects the association against bodily injury and property damage claims arising from the common elements. For a sense of the floor lenders and agencies look for, HUD's FHA condominium project approval questionnaire asks about liability coverage and references a minimum of $1 million for any single occurrence. Directors and officers liability is a separate policy, covering the board for decisions rather than for accidents; it is what responds when an owner sues over an enforcement decision or an election. Neither of these pays to repair your unit. That work sits on the property side of the program, and confusing the two is a common source of false comfort. If it helps to separate the concepts, what hazard coverage actually pays for draws the line.
Flood is written separately through the National Flood Insurance Program or a private carrier. The NFIP form for condominium buildings is the Residential Condominium Building Association Policy, and only a condominium owners' association may buy it. It applies to buildings where 75% or more of the floor area is residential, and maximum building property coverage is $250,000 multiplied by the number of units.
The part that surprises people: the RCBAP excludes contents. Personal property coverage is not included with residential condominium building property coverage, which is why FEMA's own summary tells individual unit owners they may want their own contents policies. A building can be fully compliant on flood and every owner in it still uninsured for everything they own.
At closing your lender needs evidence that the unit is covered under the master policy. Fannie Mae's rule is that a lender or servicer may accept a certificate of property insurance in lieu of a complete policy, provided the certificate includes all the information needed to determine whether the insurance meets Fannie Mae's requirements, and provided it is signed by the insurer. The lender must obtain either a copy of the current master policy or a certificate showing the subject unit is covered under it.
In practice, the request goes from the lender or title company to the association's management company or its insurance agent, and comes back as an ACORD certificate, commonly the ACORD 25 for liability and the ACORD 28 for property. That is market convention rather than an agency-named form, and it is worth knowing the difference: a certificate is a summary prepared for the requester, and it can be accurate and still tell you nothing about improvements and betterments, ordinance or law, or coinsurance.
So ask for both. The certificate satisfies the lender. The declarations page, plus the relevant endorsements, is what tells you what you own the risk on. A management company that will not release the declarations page to a unit owner under contract is itself a finding. The same document set feeds the project review that decides whether the building finances at all, which is the subject of how a condo project becomes non-warrantable.
A declarations page tells you what the building bought. It does not tell you how the association behaves after a loss. Whether claims get filed, whether repairs get finished, whether the board tells owners anything while it happens: those things are answerable, just not from paperwork. Pull the recorded documents and the current declarations page from the project's document set, read them against each other, and then ask a resident of the building what the last claim was actually like.
A policy document shows the limits. An owner who has been through a claim in the same building shows how those limits behaved.
Listings show the property, but they rarely explain the lived reality around it. On Leevli, a mover can explore the city, review neighborhood and building information, and ask a verified resident the specific questions that remain unanswered. That human layer helps readers know what to investigate before signing a lease, making an offer, or choosing between two addresses.
It covers the building itself: the structure, the roof, the common elements, and the liability exposure that comes with them. How far it reaches inside your unit depends on which structure the association bought. An all-in policy reaches interior finishes such as cabinets, flooring and fixtures. A bare walls policy stops at unfinished sheetrock and subfloor, leaving every interior finish to the owner.
The association is. Unit owners typically appear as additional insureds with respect to the common elements under standard association forms, which is a weaker position than being named. Your lender appears through a mortgagee clause, which is why the servicer asks for evidence of insurance every year. Because the board holds the claim, a decision to absorb a loss instead of filing is not yours to make.
Walls out or bare walls covers the structure up to the uncovered sheetrock and subfloor, plus items such as roof, windows and hallway carpet. Single entity, more precisely all in excluding improvements and betterments, covers original finishes but not upgrades an owner installed. All in covers the original finishes and the exterior together. Washington State's insurance regulator describes all three arrangements in plain language.
Ask the management company or the association's insurance agent in writing, and ask for the declarations page and endorsements rather than the certificate. A certificate is a summary prepared for the requester and can be accurate while telling you nothing about improvements and betterments, ordinance or law, or coinsurance. A management company that refuses to release the declarations page to an owner under contract has told you something.
It is a deductible charged against each damaged unit rather than against the building as a whole, so it lands on individual owners instead of on reserves. Fannie Mae will not accept one above $50,000 per unit. If the master carries one, Fannie Mae also requires each financed owner to hold a unit owner policy at least equal to that deductible amount.
Run it in dollars rather than percent. A tower insured for $60 million with a 5% per occurrence deductible absorbs $3 million before the carrier pays anything. That money comes out of reserves, or out of owners through a special assessment. On a large claim the deductible is often the single largest number involved, which is why the percentage on the declarations page deserves a calculator.
No. Flood is written separately, through the National Flood Insurance Program or a private carrier. The NFIP form for condominium buildings is the Residential Condominium Building Association Policy, which only an association may buy, for buildings that are at least 75% residential by floor area. Maximum building property coverage is $250,000 times the number of units, and the policy excludes contents entirely.
Fannie Mae requires fidelity or crime coverage for condo and co-op projects it finances, with three exceptions: projects that qualify for a waiver of project review, projects of 20 units or fewer, and projects where the required amount would be $5,000 or less. Where financial controls are adequate, the amount equals three months of assessments on all units. Otherwise it equals the maximum funds held at any time.
Usually, for the lender's purposes. Fannie Mae allows a lender or servicer to accept a certificate of property insurance instead of the complete policy when the certificate carries all the information needed to judge compliance and is signed by the insurer. ACORD 25 for liability and ACORD 28 for property are market convention, not agency named forms. The certificate satisfies the file. It does not tell you what you own the risk on.
The split between association and owner comes from the recorded declaration and from your state's condominium statute, so it varies by building and by state. Fannie Mae's requirements apply to the loans it buys anywhere in the country, which is why the same deductible caps show up nationally. For the local rules, read the declaration first and check your state insurance regulator's condominium guidance.
Editorial review: verify current federal and state law, insurance regulations, HOA and condominium statutes, and lender guidelines before relying on any single claim. This article is informational and does not constitute legal, financial, tax or insurance advice.
