Bare-walls vs all-in coverage

What "bare walls" actually means

When a covered loss like a fire destroys a unit's interior, "bare walls" describes the narrowest end of what a master policy will pay to rebuild. It restores the unit to a shell, ready for someone to install cabinets, plumbing fixtures, and floor and wall coverings, but it does not pay for those items themselves. Everything past framing becomes the unit owner's own responsibility, typically funded through their own HO-6 policy.

"In a 'bare walls' scenario, the HOA obtains insurance that does not rebuild the individual residential interiors but instead restores damaged homes to a shell condition with bare walls, floors and ceilings, ready for cabinets, plumbing fixtures, wall and floor coverings, and all other elements of the home."

Source: Laying it bare: Simplifying property insurance, Community Associations Institute

The spectrum between bare walls and all-in

Some master policies go further than bare walls and also rebuild the unit's original, builder-installed fixtures and finishes. Others go further still and cover owner-installed upgrades too, an approach sometimes called "all-in." There is no single, industry-wide definition of these middle and upper tiers. Each carrier and each declaration draws its own line, so the same label can mean different coverage at two different buildings. The only reliable way to know where your building falls is to read the declaration's insurance article and the master policy's actual coverage grant, not to assume a label carries a fixed meaning.

A few states even write a version of the narrow end into statute. West Virginia's enactment of the Uniform Common Interest Ownership Act requires the master policy to cover the unit itself but not improvements or betterments a unit owner installed. Check whether your own state's statute sets a similar statutory floor, or leaves the boundary entirely to the declaration.

Why the gap matters for your own coverage

The narrower the master policy, the more your own HO-6 policy has to carry. Fannie Mae requires an individual unit owner policy whenever any part of the unit's interior is not covered by the master policy, or when the master carries a per-unit deductible, and it caps that individual policy's own deductible at the greater of 5 percent of coverage or $2,500. A standard HO-6 also often ships with only $2,000 of loss assessment coverage by default, an amount commonly raised to $50,000 or $100,000, since that is the coverage that helps pay an owner's share if the master policy's deductible or an exclusion gets passed down as a special assessment. Knowing whether your building is bare walls or something broader tells you how much of that gap your own policy actually needs to close.