Do I need condo insurance if my association has a master policy?

The master policy covers the building and common areas, but not your belongings or your personal liability, and often not your floors, cabinets, fixtures or upgrades. That's what an HO-6 policy is for. Your lender may also require one.

What does an HO-6 policy cover?

Usually the parts of your unit the association doesn't insure, your personal property, your personal liability, extra living costs if you can't live there after a covered loss, and loss assessment coverage.

What is loss assessment coverage?

It helps pay your share when the association assesses owners after a direct loss to the shared property of a type your policy covers. In Florida, a unit owner policy must include at least $2,000 of it (Fla. Stat. 627.714).

Who pays the association's deductible?

It depends on your state and your declaration. In Illinois, the board can pay it as a common expense, charge it to the owner who caused the damage, or require the owners of affected units to pay it (765 ILCS 605/12). In Florida, it's generally a common expense unless an owner caused the damage (Fla. Stat. 718.111).

Condo insurance (HO-6): what the association covers and what you do — From Elona’s desk

Yes, most condo owners need their own policy. The association’s master policy insures the building, but it doesn’t cover your belongings or your personal liability, and it often stops short of your floors, cabinets and upgrades. A condo policy, called an HO-6, fills in your part.

The tricky bit is figuring out exactly where the association’s part ends and yours begins. That line is drawn by your state’s law and your condo’s declaration.

What the association usually covers

The association’s master policy is there to rebuild the shared building: the structure, the roof, the hallways, the pool, the common areas. Most also carry liability for the common areas.

What your HO-6 usually covers

An HO-6 picks up where the master policy stops. Typically:

Your part of the unit. Whatever the association doesn’t insure: often flooring, cabinets, countertops, fixtures and any upgrades you or past owners made.
Your belongings. Furniture, clothes, electronics. The master policy never covers these.
Your liability. If someone’s hurt in your unit, or water from your unit damages the one below.
Loss of use. Extra living costs if a covered loss means you can’t live there for a while.
Loss assessment. Your share when the association charges owners after a covered loss to shared property.

Where the line falls is different in each state.

Florida

In Florida

Florida law spells out what the association’s policy covers and what it leaves to you (Fla. Stat. 718.111(11)).

The association insures the condominium property as originally installed, or replaced with like kind and quality. It does not cover, and you’re responsible for:

Your personal property.
Floor, wall and ceiling coverings.
Electrical fixtures and appliances.
Water heaters and water filters.
Built-in cabinets and countertops.
Window treatments and their hardware.

Your HO-6 is where those items get covered.

Loss assessment. Florida requires every unit owner policy to include at least $2,000 of loss assessment coverage for assessments that come from the same direct loss to the property, when it’s the type of loss your own policy covers, with a deductible of no more than $250 (Fla. Stat. 627.714). That’s the legal minimum, not a target. It’s generally meant for covered damage, like a storm or fire, rather than assessments to fund repairs or reserves, so check your policy’s wording. Ask what your limit is.

Deductibles. Generally, the association’s deductible and damage beyond its coverage are a common expense shared by owners, unless the damage came from an owner’s negligence or a broken rule (Fla. Stat. 718.111(11)(j)). Some associations have voted to allocate costs differently, so check your declaration.

If your building is three stories or taller, there’s more to know about inspections and reserves. Read my post on condo owners after Surfside.

Illinois

In Illinois

The Illinois Condominium Property Act sets the rules (765 ILCS 605/12).

The association must insure the units, the common elements and the limited common elements at full insurable replacement cost. That includes the bare walls, floors and ceilings of each unit, unless the board decides otherwise. So read your declaration and rules: they tell you whether you’re responsible for more.

The association doesn’t have to cover “improvements and betterments” that owners installed: decorating, fixtures, furnishings, appliances, heating and air conditioning equipment, water heaters, built-in cabinets and other upgrades. If it does cover them, it can pass the extra cost on to the affected units.

Deductibles. For damage to a unit or the common elements, the board can pay the deductible as a common expense, charge it (after notice and a hearing) to the owner who caused the damage or whose unit it started in, or require the owners of affected units to pay it. That’s one reason the deductible on the master policy matters to you.

Required coverage. The board can require owners to carry liability coverage for damage their unit causes to another unit.

Good to know

Get the master policy summary. Your association can tell you what its policy covers and its deductible. I’ll read it with you.
Read your declaration. It’s the document that says which parts of the unit are yours to insure.
Flood is separate. Neither the master policy nor your HO-6 covers flood unless flood coverage is added. (Is flood covered by home insurance?)
Renting it out? A unit you rent to others usually needs a different setup than one you live in. Tell me before you sign a lease.

Want me to check your coverage?

Upload your HO-6 declarations page at /quote/, or send it to me with your association’s insurance summary, and I’ll show you where the master policy stops and what’s left on you.

Talk to Elona