Guides
Condo master policies: what the association covers and what you cover
How bare-walls, all-in and in-between master policies divide a condo between association and owner, who pays the master deductible, and what to ask for.
The association's master policy insures the building's structure and common areas; your HO-6 insures what the master policy does not. Where that line falls depends on the type of master policy and on your declaration and bylaws, not on any industry default, so two owners in different buildings can carry very different responsibility for the same loss. The three types you will meet are all-in, all-in excluding improvements, and bare walls.
The three master policy types
The Washington Office of the Insurance Commissioner describes the split this way (Washington OIC):
| Type | What the master policy covers | What falls to you |
|---|---|---|
| All-in | The exterior and all interior finishes: doors, windows, cabinets, paint, trim, light fixtures, floor coverings, shower and tub | Belongings, liability, loss of use, the master deductible if your documents pass it on |
| All-in, excluding improvements and betterments | Only the original interior and exterior finishes | The same, plus upgrades such as replacing laminate counters with granite |
| Bare walls ("walls out") | Damage up to the uncovered sheetrock and subfloor, including the roof and common areas | All interior finishes, plus the deductible |
Labels vary. Agents and lenders also use "single entity" for a master policy that insures the unit as it was originally built, and "walls-in" is used for both the master policy and the owner's coverage, which is why the walls-in coverage glossary entry warns against relying on the nickname. Read the policy and the governing documents. The terms master policy, bare walls coverage and all-in coverage are defined there.
What the law says about the line
State condominium statutes sometimes draw the boundary. Florida's Condominium Act requires the association's property policy to cover condominium property "as originally installed or replacement of like kind and quality," and requires the coverage to exclude personal property within the unit and, for items inside the unit boundaries that serve only that unit, floor, wall and ceiling coverings, electrical fixtures, appliances, water heaters, water filters, built-in cabinets and countertops, and window treatments. Those items and their insurance are the owner's responsibility (Fla. Stat. 718.111(11)(f), 2026 Florida Statutes).
Maryland's insurance regulator says the master policy covers common areas, the building exterior, and "the walls, floors, and fixtures that were included in the original construction of the unit." It adds that under Md. Real Property Code 11-114(c)(1) each unit owner is an insured under the master policy (Maryland Insurance Administration). Other states leave more to the documents. Use home insurance rules by state and the Florida and Maryland guides for what your state adds.
Who pays: a burst water heater (hypothetical)
Say a water heater fails in unit 4B and floods the unit and the ceiling of the unit below. The table shows where each cost lands, assuming your documents match the descriptions above. Whether upgrades are covered under an all-in policy varies by wording, so confirm that row in writing.
| Cost | Bare walls | All-in, excluding improvements | All-in |
|---|---|---|---|
| Framing, subfloor, shared pipes | Master | Master | Master |
| Drywall and paint in 4B | Owner (HO-6 Coverage A) | Master | Master |
| Cabinets and floors in 4B as originally built | Owner | Master | Master |
| 4B owner's upgrades (hardwood, granite) | Owner | Owner | Usually master; confirm |
| 4B owner's belongings | Owner (Coverage C) | Owner | Owner |
| Hotel while 4B is unlivable | Owner (Coverage D) | Owner | Owner |
| Ceiling and structure in the unit below | Master | Master | Master |
| Downstairs owner's belongings | Their HO-6, then possibly 4B's liability coverage | Same | Same |
| Master deductible | Per documents and state law | Per documents and state law | Per documents and state law |
The last row is where owners are surprised.
The master deductible
The association chooses the master deductible; the owner chooses the HO-6 deductible. The statutes then decide who carries it. In Florida, property insurance deductibles are a common expense of the association, and a unit owner is responsible for repair costs the insurance does not pay when the owner, or the owner's family, tenants or guests, caused the damage through intentional conduct, negligence or failure to follow the declaration or rules (Fla. Stat. 718.111(11)(j)). Maryland treats the deductible as a common expense for common-element losses but makes the owner of the unit where the loss started responsible for it, up to $10,000 (Md. Real Property Code 11-114(g); the cap rose from $5,000 on October 1, 2020 under MIA Bulletin 20-31).
How large can the deductible be? The agencies that buy condo mortgages cap it. Fannie Mae's Selling Guide limits a master policy's per-occurrence deductible to 5% of the master coverage amount and its per-unit deductible to $50,000, and requires owners to carry an HO-6 when there is a per-unit deductible (B7-3-03, version dated August 5, 2026). Freddie Mac's Bulletin 2026-C sets the same two limits. For both agencies the per-unit cap applies to mortgage applications dated on or after July 1, 2026. On a $20 million master policy (hypothetical), 5% is $1 million, or $10,000 per unit across 100 units. That is the number your loss assessment coverage has to be ready for. See Loss assessment coverage for HOA and condo owners and HO-6 condo insurance explained: what it covers and how much you need.
When the master policy falls short
Master policies have limits, exclusions and valuation terms like any property policy. Fannie Mae asks for master coverage of at least 100% of the project's estimated replacement cost, but that is a lender standard for financed projects, not a rule for every building. If a loss exceeds the master limit, or the policy excludes the cause, the shortfall can be assessed to owners. An assessment follows your HO-6 only when a covered peril caused the loss; a reserve shortfall or deferred maintenance bill follows no policy. Flood is a good example: the master policy and your HO-6 both typically exclude it unless the association bought separate flood coverage.
Questions to ask for the master policy
Request these in writing from the board or manager, before closing if you are buying and at each renewal if you own:
- Which master type is it, and what does it say about improvements and betterments?
- What are the limit, the valuation basis (replacement cost, guaranteed or extended replacement cost) and the covered perils?
- What are the deductibles, including separate wind, hail, hurricane or water deductibles?
- Do the declaration and bylaws pass the deductible to owners: all owners, affected owners, or the owner where the loss began? Is there a cap?
- Does the association carry flood coverage, and does it carry a deductible buy-back policy?
- When does the policy renew, and has the association's premium or special assessments risen?
- What HO-6 minimums do the documents require, and what proof do they want?
Washington's regulator advises owners to review the community's certificate of insurance at every renewal; it confirms the master limits and deductible.
If you and the association disagree
A dispute over who pays usually turns on three documents: the master policy, the declaration and bylaws, and your HO-6. In Maryland a management company can act as a claims conduit but, according to MIA Bulletin 09-22, it cannot refuse to present a unit owner's claim under the master policy. Start with the association's written position, then your insurer, then your state regulator; how to file a complaint with your state insurance department outlines that last step, and a condo-law attorney is the right place for the documents. HOA insurance requirements for owners: what you must carry covers what associations require of owners.
Key takeaways
- The master policy's type, not the unit's market value, determines what you insure: all-in, all-in excluding improvements, or bare walls.
- State condo statutes and your declaration and bylaws can move the line, so read them alongside the policy.
- The master deductible is the sharpest edge: laws and documents decide whether it lands on all owners, one owner, or the owner where the loss began.
- Lender rules cap master deductibles at 5% per occurrence and $50,000 per unit, which still leaves large numbers for owners.
- Ask for the master policy declarations at purchase and each renewal, and size your HO-6 dwelling and loss assessment limits from them.