The Ins and Outs of HOA Policies An Insurance Primer

Unless you are in the business, understanding insurance can seem complicated—but for association boards, management companies, shareholders, and unit owners, it's important that everyone is aware of the insurance that is needed and provided on their properties.

"Insuring a condo or co-op is a little different than insuring a typical home, because people don't own the entire building," says Frank DeLucia of Kaye Insurance Associates in New York City. "With a co-op or condo, you need three aspects: property, liability, and a general umbrella policy because just liability is never enough."

According to DeLucia, there are typically two policies involved for protection: the master policy provided by the condo association or co-op board, and a homeowners individual policy, which is typically written on a standard form called an HO-6.

"There are three different definitions in every association's document," says community association specialist Debbie Pasquariello of Boyarin Hourigan Blundell Insurance in Toms River. "The first is the definition of ownership, which is very clear and defines the imaginary line that is the cube of airspace that is owned. The second definition is of maintenance. Typically, where the utilities cross through the imaginary line, that's where [homeowners] begin to be responsible for maintenance of that unit; things like sheetrock, carpets, plumbing and electrical, once it's inside. When you get to the insurance definition, you will see wording like 'the association will insure all the buildings including the units as they were initially conveyed by the builder.' So now the association finds themselves insuring parts of the building they don't own and not responsible to maintain."

Master of Thy Domain

A master policy covers the common areas of a residential complex, such as the roof, stairways, elevators and basements. It also should protect the policyholder from liability situations that could occur on the common property. The master policy may also cover individual units as they were originally built, though it may or may not cover fixtures.


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  • I currently have a master hoa policy that states "walls-in up to original build excluding appliances". Since I have "walls-in" coverage, I don't have additional insurance. I figured that I would basically "self-insure" for my personal property and appliances. Now, water has leaked into my unit from the unit above. The hoa is saying that the above unit's insurance will have to pay. Anyway, going forward, it seems like I do need some type of coverage for personal liability, other disasters, etc. However, I also think that the hoa is not enforcing the policy as written; They have clearly stated that they will not pay for any damage resulting from the plumbing of an interior unit, they say that they will only cover anything outside the units. This seems to be completely contradictory to a "wall-in" master hoa policy.
  • Are individual unit owners responsible for having an individual homeowner's policy in addition to the HOA in South Carolina?