Communicating insurance changes to owners
What your state actually requires the board to tell owners about insurance, and why it is worth telling them more than the law demands.
Whether your association must notify owners when insurance changes depends on your state. California requires individual written notice for lapses, cancellations, or significant coverage changes. Texas requires notice only when required insurance becomes unavailable. Florida imposes no general notice duty at all. Check your state's statute and your bylaws, and consider notifying owners anyway.
What your state actually requires
There is no single national rule here. Some states spell out exactly when a board must tell owners about an insurance change; others say nothing at all.
| State | What triggers a required notice |
|---|---|
| California | A disclosed policy lapses, is canceled and not immediately replaced, or undergoes a significant change in coverage, limits, or deductible |
| Texas | Required insurance becomes unavailable in the market |
| District of Columbia | Any procurement, change, or termination of the association's insurance |
| Florida | No general statutory notice duty |
"there is a significant change, such as a reduction in coverage or limits or an increase in the deductible"
Source: California Civil Code §5810, State of California, mirrored by FindHOALaw
Your state may set a different trigger, a different deadline, or none at all. Read your own state's statute and your governing documents before assuming your board has, or does not have, a legal duty here.
Why tell owners even when the law doesn't require it
Florida boards have no statutory obligation to say anything when a policy changes. That does not make silence a good idea. Insurance costs have been landing hard on owners across the country.
"More than 90% of respondents reported that their property and casualty insurance premium had increased at the last or current renewal."
Source: Insurance coverage: Communities report significant challenges with rising premiums, Community Associations Institute
The same survey found communities most often covered that increase by raising regular assessments, using operating funds, or levying a special assessment. Owners who learn about a coverage change, a deductible increase, or a nonrenewal only after the fact have had no chance to plan for any of that, and no chance to check whether their own individual policy still covers the gap.
What a useful notice actually says
A notice that satisfies a statute and a notice that actually helps an owner are not always the same document. A useful one covers four things in plain language:
- What changed: new carrier, new deductible, a coverage that was dropped, or a policy that was not renewed.
- When it takes effect.
- What it means for the owner's own policy, since the master policy may leave everything past the unit's bare walls to the owner's own HO-6 policy.
- Whether the board expects the change to affect assessments, so owners are not blindsided at a special meeting.
One number worth naming specifically: a standard HO-6 policy often ships with only a small default amount of loss assessment coverage, an amount many owners find too low once they actually need it. A notice that tells owners to check that limit with their own agent turns a compliance memo into something an owner can act on before a loss, not after.
Check yourself
Answer before you read the explanation, recalling it is what makes it stick.
A California association's insurer significantly increases the deductible on the master policy at renewal. What does state law require the board to do?
A Texas association's required insurance becomes unavailable in the market. What triggers the association's statutory notice duty here?
Florida law does not require a board to notify owners when the master policy is not renewed. Why is telling them anyway still a smart move?
Sources
- California Civil Code §5810 (notice of change in insurance coverage), mirrored by FindHOALaw
- Texas Property Code §82.111, State of Texas, via FindLaw
- D.C. Code §42-1903.10, Council of the District of Columbia
- Florida Statutes §718.111(11), The Florida Senate
- Florida Statutes §720.303, State of Florida, via FindLaw
- Insurance coverage: Communities report significant challenges with rising premiums, Community Associations Institute
- IRMI Glossary of Insurance and Risk Management Terms, "10 Steps to a Well-Designed HO 6 Policy", International Risk Management Institute
Insurance
Not sure what your own state requires? Start with Master policy vs HO-6 to see where your association's duty ends and your owners' begins.
Whether a notice duty exists at all, what triggers it, and how much time the board has to send it vary by state and by your governing documents. Confirm your own state's statute before relying on any of the examples above.