What is an HOA master insurance policy?

There are three types of HOA master insurance policies, each of which offers a different level of coverage.

• Bare walls coverage, sometimes called bare walls-in coverage, only may help protect common spaces and shared structures, like a swimming pool or building lobby. It does not provide any coverage for your individual unit.
• Single-entity coverage, sometimes called walls-in coverage, may help protect common spaces and shared structures, as well as original fixtures in individual units, such as cabinets or flooring. But it does not cover upgrades to your unit, nor does it cover your personal belongings.
• All-in coverage is the most comprehensive kind of master policy. It may help cover nearly everything in the condo complex, including common spaces and shared structures, as well as individual units and certain upgrades you may make. It does not cover personal property, however; you’ll need an HO-6 policy for that.

Here’s the breakdown:

Regardless of what your HOA's master policy covers, every condo owner should carry a personal condo insurance policy. It protects three important areas: your personal items, your legal liability, and your temporary living expenses if a covered loss forces you out of your unit.

Think of it this way: the HOA's master policy generally focuses on protecting the building itself and its shared amenities, while your condo insurance typically focuses on protecting what's inside your unit and your personal financial responsibility.

Here’s what each covers:

Is an HOA master insurance policy required by law?

Many states and condominium governing documents require HOAs to carry a master insurance policy, but the required amount of coverage varies.

Every HOA master policy has its limitations, depending on the type of coverage it offers. Understanding them can help you determine the right amount of HO-6 coverage for your individual unit.

Here’s what HOA master policy typically does not cover:

• Personal belongings: Furniture, electronics, clothing, and everything else inside your unit are generally covered by your HO-6 policy, not the master policy.
• Certain interior improvements and upgrades: Renovated kitchens, custom flooring, and upgraded bathrooms may or may not be covered, depending on the type of master policy your HOA has.
• Personal liability inside your unit: If a guest gets hurt in your condo, the HOA's liability coverage doesn't apply. That's generally covered by your personal condo insurance policy.
• Loss assessment charges: If owners are assessed after a covered loss or master policy deductible, loss assessment coverage in your HO-6 can help protect you, up to policy limits.
• Floods and earthquakes: Generally speaking, neither a standard master policy nor an HO-6 covers this sort of damage. A separate coverage or endorsement is often required.

Master insurance policy or personal HO-6 policy? Which policy pays depends on what was damaged and where. Here are some common examples:

• Fire damages the building's exterior. Damage to the roof, exterior walls, and shared structure is typically covered by your HOA’s master policy.
• Fire damages the inside of a unit. This depends on your HOA's policy type. With a bare walls policy, your HO-6 may cover interior features like flooring, cabinets, and fixtures. With an all-in policy, the HOA's insurance may cover some of that.
• The unit owner’s belongings are stolen. The master policy doesn't cover personal property such as furniture, electronics, and clothing. That's typically covered under your HO-6, subject to your deductible and policy limits.
• Someone is injured in a common area: A slip in the lobby, hallway, or parking lot may fall under the HOA's liability coverage.
• Someone is injured inside a unit. The unit owner's personal condo insurance typically helps cover this.
• A burst pipe damages multiple units. Responsibility depends on where the pipe is, who maintains it, and what the master policy covers. In many cases, both the HOA's insurance and individual HO-6 policies may come into play.
• The HOA issues a special assessment. If a major loss exceeds the master policy's limits or owners are assessed for a deductible, loss assessment coverage in your HO-6 policy may help cover this.
• Floodwater enters from outside. Neither the master policy nor a standard HO-6 typically covers rising water from outside. A separate flood insurance policy is usually needed.

The HOA master policy protects the building, shared spaces, and the association — but it was never designed to protect every individual unit owner completely. Whether you're reviewing your HOA's coverage or shopping for your own condo insurance, the most important step is understanding where one policy ends and the other begins.

Request the declarations page from your HOA, review your own HO-6, and make sure the gaps are covered before you need to find out the hard way.