Earthquake coverage
What a master earthquake policy actually protects, and where the coverage gap lands on unit owners.
Earthquake damage is excluded from standard property and homeowners insurance, so it is never covered unless someone bought a separate policy or endorsement. If your association carries a master earthquake policy, it typically insures only the exterior of buildings and common areas, not the inside of units. Owners need their own policy for interior fixtures and belongings.
Your regular policy almost certainly excludes it
Earthquake is one of the perils insurers exclude from standard homeowners and property forms by default, along with flood. Coverage exists only if someone, the association or an owner, buys a separate policy or adds an endorsement for it. That is true whether the policy in question is the association's master policy or an individual owner's HO-6 policy: neither one picks up earthquake damage automatically.
"Earthquake coverage is available from most insurance companies as a separate policy or an endorsement to your homeowners or renters policy."
Source: Which disasters are covered by homeowners insurance?, Insurance Information Institute
What a master earthquake policy actually reaches
If your board has bought a separate earthquake policy for the association, do not assume it behaves like the regular master property policy. In California, where this pattern is best documented, a master earthquake policy typically insures only the outside of the buildings and the common areas, the same shell the property policy would rebuild after a fire. It leaves everything inside a unit, floors, cabinets, plumbing fixtures, to whatever coverage the owner carries. Where the exact line between master and unit coverage sits for your building is set by your policy and declaration, not by a single national rule, so read both rather than assume.
"If your homeowners association (HOA) has earthquake insurance, it covers only the outside of the condominium buildings and the common areas."
Source: California Condo Unit Owners Earthquake Insurance Policies, California Earthquake Authority
Owners need their own policy for the inside
An individual condo unit earthquake policy, sold in California through the California Earthquake Authority and available through other insurers elsewhere, covers the contents inside the unit's walls: belongings and interior fixtures, not the building structure itself. Most of these policies also offer Loss Assessment coverage, which helps an owner pay their share if the board levies a special assessment to cover an earthquake loss the association's own policy did not fully absorb. That assessment risk is real: a master policy with a large earthquake deductible or a narrow scope can still leave part of the loss for owners to split.
"Individual condo-unit earthquake policies cover the contents inside the walls of the condo unit, not the structure itself."
Source: California Condo Unit Owners Earthquake Insurance Policies, California Earthquake Authority
What varies by state
California is the only state in this evidence base with a specific rule that forces the question into the open: insurers must periodically offer earthquake coverage to residential policyholders and must use mandated disclosure language when the owner declines it. Whether your own state requires anything similar, and whether your association's governing documents or state law actually require the board to buy an earthquake policy at all, are both things a board needs to check directly rather than assume. Read your declaration and your state's insurance code, or ask your broker.
"YOUR POLICY DOES NOT PROVIDE COVERAGE AGAINST THE PERIL OF EARTHQUAKE. CALIFORNIA LAW REQUIRES THAT EARTHQUAKE COVERAGE BE OFFERED TO YOU AT YOUR OPTION."
Source: California Insurance Code §10083, State of California, via FindLaw
Check yourself
Answer before you read the explanation, recalling it is what makes it stick.
A quake damages a unit owner's interior walls and appliances. The HOA carries a master earthquake policy. Who pays for the interior repairs?
A board assumes its standard master property policy already covers earthquake damage. Is that assumption correct?
A California unit owner's individual insurer sends a notice about earthquake coverage at renewal, unprompted. What is most likely happening?
Sources
- California Insurance Code §10083, State of California, via FindLaw
- California Condo Unit Owners Earthquake Insurance Policies, California Earthquake Authority
- Which disasters are covered by homeowners insurance?, Insurance Information Institute
Insurance
Next, see how your master policy's coverage line is actually drawn in Bare-walls vs all-in coverage.
Whether your state requires an offer of earthquake coverage, and whether your association or its owners are required to buy it at all, varies by state and by your declaration. Check your governing documents and your state's insurance code directly.