CONDO OWNERSHIP
From Listings to Living
At 2 a.m. a supply line fails inside the wall between two units on the fifth floor. By morning, water has run through two ceilings below, a hardwood floor is cupping in 4B, and three owners are calling the manager. Four insurance policies could be involved, and the question everyone asks first, "is this the association's or mine?", has an answer that depends on paperwork most of them never read.
Condominium association insurance coverage has two layers. The association's master property policy insures the building and common elements up to a line drawn by the declaration and state law, and the association carries general liability for the common areas. Each owner's HO-6 policy covers what sits on the owner's side of that line: belongings, often interior finishes and improvements, personal liability inside the unit, and the owner's share of certain association losses through loss assessment coverage.
For any real loss, three things decide who pays: how the declaration defines the master policy's reach, how the master deductible is allocated, and what your state's statute says. This guide applies those three to six common losses. For an overview of how master policies are structured and how lenders police them, see our guide to condo association insurance.
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Master policies follow one of three approaches. Under bare walls, the association insures the structure up to the unfinished walls and owners insure improvements such as appliances, flooring, built-in cabinets and wallpaper. Under single entity, the master policy covers nearly all real property in the building, including original fixtures in units, but not the upgrades owners added. Under all-inclusive, the master policy also covers owner improvements and betterments. IRMI notes that the condominium's governing documents typically dictate which approach applies (IRMI). How to read the declarations page itself is covered in the condo association master insurance policy, read line by line.
| Approach | Master policy usually covers | Your HO-6 usually needs to cover |
|---|---|---|
| Bare walls | Structure, roof, common areas, up to unfinished interior surfaces | Flooring, cabinets, fixtures, appliances, paint, upgrades, belongings |
| Single entity | Structure plus original fixtures and finishes inside units | Upgrades you or prior owners added, belongings |
| All-inclusive | Structure plus interior fixtures and owner improvements | Belongings, liability, deductible exposure |
Every master claim starts with the association's deductible, and the rules for passing it to owners vary. In Florida, deductibles and damage above the coverage are a common expense, except that an owner pays for repairs not covered by insurance when the damage was caused by the owner's, family's, tenants' or guests' intentional conduct, negligence or failure to follow the declaration or rules (Fla. Stat. 718.111(11)(j)). Associations can opt out of that allocation by a majority of all voting interests. In Maryland, the owner of the unit where damage originated can be charged up to $10,000 of the master deductible, while damage originating in common elements or from outside makes the deductible a common expense (Maryland Insurance Administration).
Florida's insurance rules apply to every residential condominium "regardless of the date of its declaration." The master policy must cover the property as originally installed and must exclude personal property in units along with floor, wall and ceiling coverings, electrical fixtures, appliances, water heaters, water filters, built-in cabinets, countertops and window treatments that serve only one unit (Fla. Stat. 718.111(11)(f)). A Florida declaration that promises an all-in policy cannot deliver one on those items.
| Loss | Usually responds | What decides it |
|---|---|---|
| Pipe bursts inside a wall | Master for the structure; HO-6 for finishes and belongings | Where the pipe sits, coverage approach, deductible allocation, negligence |
| Kitchen fire in a unit | Master for the structure; HO-6 for interior, belongings, loss of use | Origin rule, negligence clause, deductible size |
| Roof leak into a unit | Master if a covered peril caused it; maintenance provisions if not | Insurable event or wear, roof as a common element |
| Hurricane | Master for wind, subject to a named storm deductible; separate flood policy for flood | Percentage deductible, flood coverage, loss assessment limits |
| Slip and fall in the lobby | Association general liability | Liability limits, whether a judgment exceeds them |
| Theft from a unit | HO-6 personal property | Owner's deductible and limits; the master never covers belongings |
The first question is which side of the boundary the pipe sits on. Declarations differ: some treat a pipe serving only one unit as part of that unit or a limited common element, and a riser serving several units as a common element. The building damage itself, such as drywall and framing, is typically the master policy's, within the coverage approach. Flooring, paint and cabinets in each damaged unit go to each owner's HO-6, and in Florida those items are excluded from the master policy by statute.
Then comes the deductible. If the repair costs less than the master deductible, there is no master claim at all, and the declaration's maintenance and allocation provisions decide who pays. Under Maryland's origin rule, the owner of the unit where the line failed can be charged up to $10,000 of that deductible. Under Florida's rule, the deductible stays a common expense unless the owner was negligent, for example by ignoring a known leak. A slow leak that went on for weeks may not count as a covered event under either policy, so report water the day you see it.
Fire is a covered peril on the master and the HO-6. The master pays to restore the structure within its scope, after its deductible. Your HO-6 pays for your belongings, your share of interior finishes, and temporary housing if your policy includes loss of use coverage. Neighbors' smoke-damaged belongings go to their own HO-6 policies first.
Where a fire was caused by negligence, such as an unattended stove, Florida makes the responsible owner liable for costs not paid by insurance, including damage to other owners' personal property, while preserving the insurer's subrogation rights. This is the scenario where your HO-6 liability coverage and its deductible coverage matter as much as its contents limit.
In a typical multi-unit condo building the roof is a common element, but confirm it in the declaration. If wind or hail tore it open, the leak is a covered loss under the master policy, subject to its deductible, and Maryland treats a deductible for damage originating in common elements as a common expense. If the roof simply wore out, there may be no insurable event. Florida law says that, in the absence of an insurable event, the declaration's maintenance provisions decide whether the association or the owner repairs the damage. A board that deferred roof replacement may owe the repair under those provisions, but your contents still fall to your HO-6.
Wind damage goes to the master policy, usually subject to a named storm or hurricane deductible expressed as a percentage. For homeowners policies, the NAIC reports that these percentages can range from 1% to 10% of the insured home's value, and that 19 states plus the District of Columbia have hurricane or named storm deductibles in place (NAIC). For loans sold to Fannie Mae, the master deductible may not exceed 5% of the master property coverage amount, and a per-unit deductible may not exceed $50,000 per unit (Fannie Mae B7-3-03).
Flood and storm surge are a separate line. Associations can buy a Residential Condominium Building Association Policy through FEMA's National Flood Insurance Program. FEMA's own material for owners is titled "Condo Association Flood Insurance Policies Don't Protect the Belongings in Your Home," and it points unit owners to a contents-only flood policy to fill that gap (FEMA FloodSmart). Do not assume your HO-6 picks up flood; read its exclusions and ask your agent.
Injuries in common areas are the association's liability exposure. Fannie Mae requires associations in eligible projects to carry general liability of at least $1 million per occurrence for bodily injury and property damage arising from the common elements (Fannie Mae B7-4-01). Your HO-6 is not involved unless you are personally at fault. If a judgment exceeds the association's limits, the shortfall becomes an association expense, and the Maryland Insurance Administration describes loss assessment coverage as paying an owner's share of an assessment for a loss that exceeds the master policy's limits. A guest who falls inside your unit is your HO-6 liability claim.
The master policy does not cover your belongings. Florida requires the master policy to exclude all personal property within units. A burglary is a personal property claim under your HO-6, after your own deductible. Damage to a unit entry door can land on either side depending on whether the declaration makes the door part of the unit. Theft of association property, such as lobby furniture, is a master claim. Theft of association money by someone with check authority is a different coverage: Florida requires insurance or fidelity bonding for everyone who controls or disburses association funds, sized to the maximum funds in custody at any one time.
A deductible that is a common expense gets paid from reserves, from the operating budget, or through a special assessment divided by each unit's share. A simple illustration: say a building insured for $40 million carries a 2% named storm deductible. A hurricane produces a covered loss above that amount, so the association absorbs the first $800,000. If reserves cannot cover it and your unit carries a 1.25% share of common expenses, your assessment would be $10,000.
That number is the reason the deductible structure matters more than the premium. Our guide to the HOA special assessment process covers notice, payment plans and challenges once the bill arrives.
Loss assessment coverage on your HO-6 pays your share of certain association assessments. Florida requires every unit owner policy to include at least $2,000 of property loss assessment coverage, with a deductible of no more than $250 per direct property loss (Fla. Stat. 627.714). The same statute says the limit that applies is the one in effect one day before the loss, so raising it after a storm is named does not help.
Two cautions. First, the minimum is small next to the illustration above, so ask your agent what higher limits your insurer offers. Second, not every policy applies loss assessment coverage to a deductible assessment; the Maryland Insurance Administration advises owners to ask their insurer whether it does.
Condominium association insurance coverage ends at the policy limit, and losses above it, or losses the policy excludes, become association expenses. Florida says damages in excess of coverage are a common expense, and the statute requires the replacement cost behind the coverage amount to be determined at least once every three years. Fannie Mae requires master property coverage of at least 100% of the estimated replacement cost of the project improvements. A building insured on a stale valuation can meet the paperwork and still fall short after a total loss, and owners fund the gap.
Your own limits follow from the association's. When the master policy carries a per-unit deductible, Fannie Mae requires the borrower to maintain a unit owner policy. Sizing that HO-6 dwelling limit, loss assessment and liability is covered in how much condo insurance you need, and the definitions of covered perils are in what hazard insurance covers.
Most owners first read their condominium association insurance coverage after the water is already on the floor. Doing it earlier takes an afternoon.
Policies say who should pay; owners who have been through a claim know who actually did and how long it took.
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.
Usually the building's structure and common elements under a master property policy, general liability for injuries in common areas, and often fidelity or crime coverage for association funds. How far into your unit the master policy reaches depends on whether the declaration uses bare walls, single entity or all-inclusive coverage, and on state law. It does not cover your belongings or your personal liability inside your unit.
It depends on where the pipe sits and how the declaration allocates the deductible. Structural damage usually falls under the master policy if the cost exceeds its deductible, while flooring, paint and belongings go to each owner's HO-6. Below the deductible, the declaration decides. In Maryland the owner of the unit where it started can be charged up to $10,000 of the deductible, and in Florida negligence shifts uncovered costs to the owner.
The association pays the first dollars of any covered loss up to its deductible, then the insurer pays the rest. The association covers that amount from reserves or the budget, charges it to a responsible owner, or spreads it across all owners through a special assessment, depending on the declaration and state law. Named storm deductibles are percentages, so on a large building they can reach hundreds of thousands of dollars.
Bare walls coverage stops at the unfinished interior surfaces, so your HO-6 must cover flooring, cabinets, fixtures, appliances and paint. Walls-in coverage, a term often used for single entity or all-inclusive approaches, extends the master policy into the unit's fixtures and finishes. The declaration sets the approach, and in Florida the statute excludes certain interior items from the master policy regardless of what the declaration says.
Single entity coverage insures the building as one structure, including fixtures inside units as originally built, but not upgrades owners added. All-in coverage also insures those owner improvements and betterments. If you renovated a kitchen in a single entity building, the upgrade is yours to insure on your HO-6. A common mistake is assuming a remodel is covered because the original kitchen was.
Start from the master policy's largest deductible, usually the named storm deductible, and multiply it by your unit's share of common expenses. That is your likely assessment after a major loss. Florida requires at least $2,000 on every unit owner policy, which may fall far short. Confirm with your insurer that the coverage applies to deductible assessments, since not every policy does.
Flood is handled separately from wind and other perils. Associations can buy a Residential Condominium Building Association Policy through the NFIP, which insures the building. FEMA warns owners that association flood policies do not protect the belongings in their homes and points them to a contents-only flood policy. Ask your board whether the building carries flood coverage and in what amount.
Check the declaration and your HO-6 for notice deadlines, and report immediately in writing. In Florida, the association is not obligated to pay for repairs as a common expense if the owner knew or should have known of the loss and did not report it until after the association's claim was settled or denied as untimely. Late reporting can turn a covered loss into your bill.
Significantly. Florida applies its condominium insurance statute to every residential condominium regardless of declaration date, mandates which interior items the master policy excludes, and requires $2,000 of loss assessment coverage on unit owner policies. Maryland caps the master deductible charged to the unit where damage originated at $10,000. Other states leave more to the declaration, so read your state's condominium act alongside it.
The shortfall becomes an association expense, which usually means reserves first and then a special assessment on all owners by their share of common expenses. Florida treats damages in excess of coverage as a common expense. Loss assessment coverage on your HO-6 can pay your portion up to its limit, which is why that limit should be sized to the building's actual exposure.
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.
