HOA insurance 101
What your association's policy actually covers, and where your own coverage has to pick up.
HOA insurance is not one policy. It is a stack of coverages: a master policy on common elements and, depending on its structure, part of each unit, plus separate lines like general liability, directors and officers, and fidelity bonds. What each line covers, and what law requires, varies by state and your governing documents.
Why the association carries insurance at all
In most states, carrying property insurance on the common elements is not a board's choice, it is a statutory duty. States that adopted the Uniform Common Interest Ownership Act require the association to insure common elements against loss.
"against all risks of direct physical loss commonly insured against"
Source: West Virginia Code §36B-3-113, State of West Virginia
How much coverage that duty requires varies sharply by state, so check your own state's statute. The Uniform Act's own default floor is only 80 percent of actual cash value, not full replacement cost. Florida sets a higher bar: association property insurance must be based on full replacement cost, determined by an independent appraisal, no matter what the declaration itself says. Texas lands back at the Uniform Act's 80 percent floor. Two states, two different statutory minimums, for the same basic idea.
One policy, many lines
"Master policy" is shorthand for a bundle of separate coverages, each answering a different question. Property coverage rebuilds common elements and, depending on the policy, some of each unit's interior after a covered loss. General liability responds to a bodily injury or property damage claim from the pool, the parking lot, or normal association operations.
"designed to help protect the HOA when a claim arises from the ownership, maintenance, or use of common areas, or from the normal activities of the association"
Source: HOA General Liability: What Premises and Operations Really Covers, StarNet Insurance Group
Liability usually does not cover damage to the HOA's own buildings, roofs, or equipment; that is the property line's job. Directors and officers (D&O) coverage protects the board against claims over its decisions. Fidelity or crime coverage guards against theft or dishonesty by anyone who handles association money, board member or hired manager alike. Storm, flood, and earthquake losses sit outside all of this: they are standard exclusions under ordinary property and homeowners forms and need their own separate coverage or endorsement. Each line gets its own lesson in this Course; this one is the map.
Where the master policy stops and your policy begins
Inside a single unit, the master policy typically stops well short of a finished home. A "bare walls" master policy restores a damaged unit to a shell, not a move-in-ready interior.
"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
Whether your building's policy is bare walls or something broader is set by the policy and declaration, not by a national rule, so read yours. That gap is what an individual owner's own HO-6 policy exists to fill. Whether state law forces an owner to buy one varies just as much as the master policy floor does.
| Jurisdiction | Association policy floor | Owner (HO-6) coverage required by statute? |
|---|---|---|
| West Virginia (Uniform Act) | 80% of actual cash value | Not generally |
| Florida | Full replacement cost, appraisal based | No general statute |
| Texas | 80% of replacement cost or ACV | No general statute |
| District of Columbia | Set by declaration | Yes, mandated by statute |
A mortgage lender or the declaration itself is often what actually makes a Florida owner carry HO-6 coverage, not the state.
Check yourself
Answer before you read the explanation, recalling it is what makes it stick.
A pipe bursts inside a unit, damaging the drywall, flooring, and cabinets. The master policy is written bare walls. Who pays to repair the drywall and flooring?
A storm damages the clubhouse roof. Which line of coverage responds to that loss?
A Florida condo association's volunteer treasurer, not a paid manager, controls the bank account. Must the association bond or insure this person?
Sources
- West Virginia Code §36B-3-113, State of West Virginia, via FindLaw
- Florida Statutes §718.111(11), The Florida Senate
- Texas Property Code §82.111, State of Texas, via FindLaw
- D.C. Code §42-1903.10, Council of the District of Columbia
- Florida Statutes §720.303, State of Florida, via FindLaw
- HOA General Liability: What Premises and Operations Really Covers, StarNet Insurance Group
- Laying it bare: Simplifying property insurance, Community Associations Institute
Insurance
Next, find out exactly where your building's coverage line falls: read Master policy vs HO-6.
What counts as the statutory floor for the association's policy, whether an owner is legally required to carry HO-6 coverage, and whether a building's coverage is bare walls or broader all vary by state and by your own declaration.