Coverage for Associations, HOAs, and Property Managers
Condominium associations are responsible for insuring the building, the shared spaces, and the association itself. A condo master insurance policy, also called HOA insurance, is designed to help cover property damage to those areas and liability claims tied to common property.
Keslar works with multiple insurance carriers, so our team can compare available options and recommend coverage based on your association’s governing documents, property, and risks.
What Is a Condo Master Insurance Policy?
A condo master policy is a commercial property and liability policy purchased by the condominium or homeowners association, not by individual unit owners. Depending on how it’s written, it may cover:
- The building’s exterior and structural elements
- Common areas such as hallways, elevators, lobbies, clubhouses, and pools
- Liability for injuries or damage that occur in shared spaces
- The association, its board, and people acting on its behalf, subject to the policy’s terms
The coverage your association needs depends on its declaration, bylaws, and the property itself.
Is a Master Policy Required?
In New Hampshire, the Condominium Act (RSA 356-B:43) requires condo documents to direct the association to obtain a master casualty policy for the full replacement value of the structures and a master liability policy. In Maine, the Condominium Act (33 M.R.S. §1603-113) generally requires associations to carry property insurance on the common elements and liability insurance, to the extent reasonably available.
Massachusetts works differently. The Massachusetts Condominium Act (M.G.L. c. 183A) gives the association the power to insure the common areas in its own name, but the amount and type of master property and liability coverage is generally set by the master deed, bylaws, or declaration of trust, and by mortgage lender requirements. The Act does require condominiums with more than 10 units to carry fidelity insurance equal to at least one-fourth of annual assessments, excluding special assessments, unless unit owners vote to modify that requirement. Associations must also keep current insurance policies on file for unit owners to review.
Requirements can vary based on when a condominium was created and what its documents say, so we recommend reviewing your declaration or master deed with your agent and, when needed, your association’s attorney.
Types of Condo Master Policies
Most condo master policies fall into one of three types. Your association’s documents typically determine which one applies:
- Bare walls: generally covers the building structure and common elements. Unit owners are usually responsible for what’s inside their walls.
- Single entity: generally adds coverage for original built-in features inside units, such as cabinets, fixtures, and appliances.
- All-in (all-inclusive): generally covers built-in unit elements and many improvements, but typically excludes owners’ personal belongings and personal liability.
Not sure which type your association has or needs? Our team can review your governing documents with you and explain the options.
Condo Master Insurance: Frequently Asked Questions
1. What is a condo master insurance policy?
A condo master insurance policy is purchased by the condominium or homeowners association to cover shared property, common areas, and association liability for the complex. It generally does not cover individual unit owners’ belongings or personal liability.
2. What does a master policy typically cover?
Depending on the policy type and how it’s written, a master policy may include:
- The building’s exterior and structure
- Shared spaces like hallways, elevators, lobbies, stairwells, pools, and clubhouses
- Liability coverage for injuries on common property
- Optional coverages such as directors and officers (D&O) liability, equipment breakdown, or crime coverage
3. What are the different types of condo master policies?
There are generally three types: bare walls, single entity, and all-in. Bare walls typically covers only the structure and common elements. Single entity typically adds original built-in fixtures and appliances. All-in typically covers most built-in unit elements, but not personal contents or personal liability. Your association’s bylaws or declaration usually specify which applies.
4. Do individual unit owners still need personal condo insurance (HO-6)?
In most cases, yes. State law focuses on what the association must insure, but many mortgage lenders and association bylaws require unit owners to carry an HO-6 policy. Even when it isn’t required, an HO-6 policy can cover what the master policy typically doesn’t, such as personal belongings, interior finishes, personal liability, and loss assessments. Unit owners can learn more on our condo insurance page.
5. What is loss assessment coverage, and why does it matter?
Loss assessment coverage is part of many HO-6 policies. It may help a unit owner pay their share of an association assessment, such as a portion of the master policy deductible or costs that exceed the master policy’s limits. Limits and eligible assessments vary by policy, so it’s worth comparing your loss assessment limit to your association’s deductible.
6. Can condo board members be held liable for association decisions?
Board members can be named in claims related to association decisions, such as disputes over budgets, rule enforcement, or repairs. Directors and officers (D&O) liability insurance can help cover defense costs and settlements, subject to the policy’s terms. Many associations carry D&O coverage for this reason, and the bylaws may also address how board members are protected.
7. Does a condo master policy cover flood or earthquake damage?
Standard master policies typically exclude flood and earthquake. Associations can often buy separate coverage, and flood coverage for the building may be available through the National Flood Insurance Program or private flood carriers. Properties in higher-risk areas, including coastal and waterfront locations, should review this with their agent.
8. What affects the cost of a master policy?
Pricing generally depends on the size and value of the property, the number of units, construction type, location, claims history, and the coverage selected. Risk improvements such as sprinkler systems or updated wiring may help with pricing, depending on the carrier.
9. Who pays for repairs when damage occurs in a unit?
It depends on the master policy type, the association’s documents, and where the damage started. Damage to the structure or from a shared system, such as the roof or a common pipe, may fall under the master policy. Damage inside a unit that the master policy doesn’t cover would typically fall to the unit owner’s HO-6 policy. For a detailed example, see our guide: What Is Master Insurance on a Condo?
10. Can the master policy be customized for our association?
In most cases, yes. Master policies can often be tailored to your governing documents, property layout, and specific risks. Additional options may include umbrella liability, crime or fidelity coverage, and ordinance or law coverage, depending on the carrier.
Review Your Association’s Coverage
Renewal coming up, or unsure whether your current master policy matches your declaration? Send us your governing documents and current policy, and our team will walk through what’s covered, where the gaps may be, and what options are available.
