Owner insurance requirements

Four layers decide the answer, not one

Four things stack on top of each other, and the strictest one wins. If a unit is financed through Fannie Mae eligible financing, the lender's guide can require a policy even where state law is silent. State statute sets its own floor, and that floor moves sharply from state to state. On top of state law sits the association's declaration, which can require an HO-6 policy even where state law does not ask for one at all.

Whether your state imposes an individual coverage duty, and what it requires, varies. Check your own declaration and your state's condominium or HOA statute before assuming any answer here applies to you.

State law splits at least three ways

The District of Columbia is the clear case: its code states plainly that individual coverage is required, not optional.

"Unit owners must obtain their own condominium insurance."

Source: D.C. Code §42-1903.10, Council of the District of Columbia

Texas sits in the middle: its statute preserves an owner's right to buy coverage for the owner's own benefit, but frames the association's coverage, not the owner's, as the legal floor. That right is not an obligation Texas law itself imposes. Florida goes further in the other direction: both the condominium statute and the separate homeowners' association statute were read directly for this course, and neither contains a general requirement that unit owners carry their own policy. Where a Florida owner does carry one, that requirement traces back to the declaration or to a mortgage lender, not to state law.

Financed units answer to Fannie Mae too

Even in a state with no statutory duty, a unit financed under Fannie Mae eligible financing can face its own individual policy requirement. Fannie Mae requires it when any part of a unit's interior is not covered by the master policy, or when the master policy carries a per-unit deductible. That individual policy must be written on a replacement cost basis, and its deductible is capped at the greater of five percent of the coverage amount or $2,500.

One more number worth checking: a standard HO-6 policy often defaults to only $2,000 of loss assessment coverage, the piece that reimburses an owner's share of a special assessment tied to an insured loss. That default is commonly considered too low and raised to $50,000 or $100,000. It is worth confirming on any policy an owner shows the board.