1. What Is a Master Policy?
If you own a condo in the United States, youve probably heard your homeowners association (HOA) or condo association mention something called a “master policy.” But what exactly is a master policy, and why should you care about it as a condo owner?
Definition of a Master Policy
A master policy is an insurance policy purchased by your condo association to provide coverage for the overall building and common areas. It’s different from the insurance policy you buy for your individual unit. The master policy is designed to protect the structure of the building, shared spaces, and sometimes even parts of your unit, depending on the coverage type.
Why Is a Master Policy Essential?
The master policy is essential because it helps manage risk and protect everyone in the community from large financial losses due to damage or liability issues that affect more than one unit. Without this coverage, every unit owner could be on the hook for expensive repairs or legal costs resulting from incidents in common areas or structural damage.
Types of Coverage in a Master Policy
Master policies generally come in three main types. Here’s a simple breakdown:
| Type | What It Covers |
|---|---|
| Bare Walls Coverage | Covers only the building’s structure and common areas—think exterior walls, roof, hallways. You’re responsible for everything inside your unit, including interior walls, floors, and fixtures. |
| Single Entity Coverage | Covers everything bare walls does plus built-in items in your unit (like cabinets or fixtures), but not your personal property or upgrades you make after moving in. |
| All-In Coverage (or All-Inclusive) | Covers almost everything attached to your unit when it was originally built—including fixtures, flooring, and appliances—but still not your personal belongings. |
Key Takeaways
The type of master policy your condo association has will impact what you need to cover with your own insurance. Understanding what the master policy includes—and what it doesn’t—can save you from gaps in coverage and unexpected costs down the road.
2. Common Coverage Provided by Master Policies
When you own a condo, it’s important to know what your association’s master policy actually covers. This coverage directly impacts what you’re responsible for as a unit owner. Here’s a breakdown of the key areas that master policies usually cover:
Building Structure
The master policy typically covers the main structure of the building, including the roof, exterior walls, and shared systems like plumbing and electrical. This means if there’s damage to these parts from events like fire or storms, the insurance should help pay for repairs.
Common Areas
Common areas—like hallways, lobbies, elevators, gyms, pools, and clubhouses—are usually protected under the master policy. If someone slips in the lobby or if the fitness center gets damaged, the policy helps with repair costs or liability claims.
Liability Coverage
This part of the policy helps protect against lawsuits if someone is injured in a common area. For example, if a visitor falls on an icy walkway maintained by the association, liability coverage can help pay for medical bills or legal expenses.
Typical Coverage Summary
| Area Covered | What’s Included | What’s Not Included |
|---|---|---|
| Building Structure | Exterior walls, roof, foundation, shared systems | Your unit’s interior finishes (unless specified) |
| Common Areas | Lobbies, hallways, elevators, amenities | Your personal belongings inside your unit |
| Liability | Injuries in common spaces, legal defense costs | Accidents inside your own unit |
Coverage Limits to Keep in Mind
The master policy comes with limits—meaning there’s a maximum amount it will pay out for each type of claim. If damages or losses go beyond this limit, owners might have to cover the extra costs themselves or through their individual condo insurance (HO-6 policy). It’s smart to ask your association for details about their coverage limits so you know where your responsibility starts.
3. What the Master Policy Doesn’t Cover: Your Responsibility
While your condo association’s master policy offers important protection for common areas and the building’s structure, it doesn’t cover everything inside your unit. As a condo owner, it’s essential to understand where the master policy stops and your own responsibility begins.
What the Master Policy Typically Covers vs. What It Doesn’t
| Covered by Master Policy | Not Covered by Master Policy (Your Responsibility) |
|---|---|
| Exterior walls | Your personal belongings (furniture, electronics, clothing) |
| Roof and shared hallways | Appliances inside your unit |
| Lobby, elevators, and amenities (gym, pool) | Upgrades and improvements you make (custom cabinets, new flooring) |
| Landscaping and parking lots | Personal liability for accidents inside your unit |
| Pipes and wiring behind walls (depends on policy type) | Damage to interior walls, ceilings, or floors in your unit |
The Importance of Individual Condo Insurance (HO-6 Policy)
A master policy is not a substitute for your own insurance. You’ll need an individual condo insurance policy—often called an HO-6 policy—to protect what the master policy leaves out. This coverage steps in for:
- Your personal property: Covers loss or damage to items like laptops, jewelry, or furniture due to theft, fire, or certain disasters.
- Interior parts of your unit: Includes built-in fixtures, flooring, cabinetry, and sometimes even interior walls depending on the master policy type.
- Personal liability: Protects you if someone is injured inside your condo and sues for damages.
- Loss assessment: Helps pay your share of costs if the association’s insurance isn’t enough to cover a major claim affecting shared property.
How to Know What You Need
The best way to be sure you’re properly protected is to review your condo association’s master policy documents carefully. Check whether it’s “all-in” (covers fixtures and installations within units) or “bare walls” (covers only basic structure). Then talk with an insurance professional about filling in the gaps with an HO-6 policy tailored to your needs.
4. How to Coordinate Your Insurance with the Association
Review Your Condo Bylaws Carefully
Before you buy any condo insurance, it’s crucial to understand what your condo association’s master policy covers and what it doesn’t. Start by reading your condo bylaws or declarations. These documents spell out the boundaries of responsibility between the association and individual unit owners. If you’re unsure, don’t hesitate to ask your property manager or board for clarification.
Key Questions to Ask When Reviewing Bylaws:
- What areas are covered by the master policy—just common areas or also parts of my unit?
- Is coverage “bare walls,” “single entity,” or “all-in”?
- Who is responsible for fixtures, appliances, flooring, and interior walls?
Identify Coverage Gaps
Even a robust master policy may leave gaps that put you at risk. Common exclusions include personal property, improvements you’ve made to your unit, loss of use if your home becomes unlivable, and personal liability for incidents inside your unit.
Typical Coverage Breakdown Table
| Coverage Area | Master Policy (Association) | Your HO-6 Policy |
|---|---|---|
| Building Structure (Exterior) | Usually Covered | Not Needed |
| Interior Walls & Fixtures | Depends on Policy Type* | If not covered by Master Policy |
| Personal Property (Furniture, Clothing, etc.) | Not Covered | Covered |
| Liability Inside Unit | Not Covered | Covered |
| Loss of Use/Additional Living Expenses | Not Covered | Covered |
| Your Improvements/Upgrades | If “All-In” Policy Only | If not covered by Master Policy |
*Check if your association uses “bare walls,” “single entity,” or “all-in” coverage types.
Work With Your Condo Association for Complete Protection
Your condo association wants everyone protected. Stay in touch with them about changes in master policy coverage or deductible amounts. Share questions or concerns about gaps you’ve found. Some associations even require proof that you carry a certain level of personal insurance.
Tips for Coordinating Coverage:
- Attend Board Meetings: Stay updated on policy changes or discussions about insurance.
- Create a Checklist: List what’s covered by the association vs. your own HO-6 policy.
- Ask About Deductibles: Find out if you’re responsible for part of a claim through the association’s deductible.
- Share Documentation: Keep copies of both policies handy so you can quickly compare and answer questions.
- Talk to an Insurance Agent: Choose one experienced with condos who can help you spot gaps and recommend additional coverage as needed.
The more informed you are, the easier it is to make sure there are no surprises if something goes wrong in your building or unit.
5. Filing a Claim: What Every Condo Owner Should Know
Understanding the Claims Process
If something happens in your condo—like water damage, fire, or theft—it’s important to know who to contact and how to file a claim. Knowing whether the master policy or your personal condo insurance covers the incident can save you time, money, and stress.
Who Handles What? Association vs. Personal Insurance
| Type of Damage or Loss | Who to Contact First | Covers |
|---|---|---|
| Damage to common areas (hallways, lobby, roof) | Condo Association/Property Manager | Master Policy |
| Damage within your unit (walls, floors, built-in fixtures) | Check with Association first; may involve both insurers | Master Policy or Your Policy (depending on coverage details) |
| Your personal belongings (furniture, electronics, clothing) | Your Personal Insurer | Your Condo Insurance Policy (HO-6) |
| Liability claims (someone gets injured inside your unit) | Your Personal Insurer | Your Condo Insurance Policy (HO-6) |
Practical Steps for Filing a Claim
- Assess the Situation: Determine what was damaged and where the damage occurred.
- Review Your Policies: Look over both your personal HO-6 policy and your association’s master policy documents.
- Notify the Right Party: For building-wide issues or shared areas, contact your property manager or condo association. For personal property losses or injuries in your unit, contact your insurer directly.
- Document Everything: Take photos or videos of the damage, keep receipts, and write down details about what happened.
- Submit Your Claim Promptly: Both insurers and associations have deadlines for reporting claims. Don’t wait!
- Follow Up: Stay in touch with both the association’s management and your own insurance agent to track progress.
Avoiding Common Pitfalls
- Don’t assume all damage is covered by one policy: There are often gaps between master and personal policies—know where yours end and begin.
- Avoid delays: Waiting too long to report an issue can lead to denied claims.
- Keep records: Save emails, letters, and notes from phone calls related to your claim.
- If in doubt, ask: When you’re not sure whose insurance should cover a problem, ask your property manager or insurance agent before filing a claim.
Navigating Gray Areas
If it’s unclear whether the master policy or your own policy covers certain damages (for example, if a leak starts in a common area but causes damage inside your unit), it’s best to notify both parties. They can coordinate to determine coverage responsibilities so you aren’t left footing the bill alone.
