Condo insurance and the association's master policy

A condo has two insurance policies covering one building. The association holds a master policy, and each owner holds a policy for their own unit. Neither covers everything, and your association's documents decide where one ends and the other begins.

The master policy

The master policy is held by the condominium association and paid for from the association dues. It covers the shared parts of the building, such as the roof, basement, elevators and walkways.

Your unit-owner policy

The unit-owner policy, called an HO-6, is a homeowners policy bought and held by the unit owner. It covers the unit's interior, your personal property and your liability within the unit.

Where the line falls

The split differs from building to building. In some buildings, the master policy covers the unit's basic structure, including the walls, floors and fixtures from the original construction, and the HO-6 covers only the interior and its contents. An owner who replaced the original kitchen cabinets or put in new floors has improvements the master policy may not cover.

Check the condominium bylaws to confirm which elements the master policy covers and which it leaves to the unit owner.

Assessments after a loss

After a loss, the association can charge every unit owner a share of what it has to pay. An HO-6 can include loss assessment coverage, which pays your share of an assessment charged to all the owners after a covered loss. Ask your insurer whether your policy has it and what its limit is.

What a unit-owner policy usually leaves out

A unit-owner policy is a homeowners policy, so the usual exclusions apply. Flood and earthquake are typically excluded from homeowners policies.

An annotated example

What to do next

Ask the association for the master policy's declarations page or a summary of it, and read the bylaws section on insurance. Mark what the master policy covers inside your unit and what it leaves to you. Take that list to your insurer or agent, with any improvements you've made, and ask about the loss assessment add-on.