A loss in a condominium or homeowners association can affect shared property, private units, or both. The association and individual owners may have separate policies, separate responsibilities, and separate claims arising from the same event.
The starting point is not a label such as “walls-in” or “all-in.” It is a coordinated review of the governing documents, the association’s policy, each owner’s policy, and the damage itself.
Start With the Governing Documents
The declaration, bylaws, and CC&Rs commonly address which property the association maintains and insures, what owners must insure, and how association expenses may be allocated. State law may also affect those obligations.
These documents should be reviewed alongside the full insurance policies. A certificate of insurance or summary may show limits and deductibles, but generally does not provide all the terms, conditions, and exclusions needed to determine coverage.
The Utah Insurance Department recommends that condo and townhome owners consider their CC&Rs, declaration and bylaws, association policy, and its deductible or self-insured retention when assessing coverage needs. Its condo and townhome insurance guidance also notes that these materials can affect how much coverage an owner needs.
How the Master Policy and Unit Policy Fit Together
An association generally purchases a master policy for property it owns or is responsible for insuring. A unit owner generally purchases an HO-6 policy for the owner’s insured interests. The exact division depends on the policy language, governing documents, and applicable law.
Common arrangements are often described this way:
- All-in: The association policy may insure the structure and certain interior finishes.
- All-in, excluding improvements or betterments: Original finishes may be included, while owner-installed upgrades may not be.
- Bare walls or walls-out: The association policy may cover the building structure and common property, leaving interior finishes to the unit owner.
These are practical descriptions, not universal definitions. Washington’s Office of the Insurance Commissioner provides examples of the items that may fall within different master-policy arrangements in its condo insurance guide. The property boundary still needs to be checked against the actual documents and policies.
An HO-6 policy may cover items such as owner-responsible portions of the unit, improvements, personal property, liability, and additional living expenses, depending on the policy selected. The association policy and HO-6 should be compared item by item, not assumed to fit together automatically.
What About Roofs, Lobbies, Elevators, and Shared Plumbing?
A roof, exterior wall, lobby, hallway, or elevator is commonly treated as shared or common property, but the governing documents and policy control the responsibility in a particular community. A shared plumbing system may cross common and unit boundaries, so the location and ownership of the damaged component can matter.
For each affected area, the association and owner should identify:
- Who maintains the damaged component.
- Who is responsible for insuring it.
- Whether the component is included in the master policy’s covered property.
- Whether an owner’s policy may cover related interior damage or property.
- Whether a specific deductible, exclusion, or coverage limit applies.
This review can reveal separate policy interests within one building. For example, an association may present a claim for damage to common elements while an owner presents a separate claim for contents or for unit improvements insured under the HO-6. Each claim should be tied to the correct insured, property, and policy.
Deductibles and Loss Assessments
A master-policy deductible may be significant, and the fact that one event affects several units does not, by itself, determine who pays it. The association documents and applicable state law may address whether the deductible is treated as a common expense, allocated to a particular owner, or handled another way.
The governing documents should be checked for provisions addressing:
- Deductible allocation by cause or location.
- Damage originating within a unit.
- Negligence or owner responsibility.
- Losses affecting several units or common elements.
- Special assessments and other shared expenses.
Rules can vary by jurisdiction. For example, the Maryland Insurance Administration describes Maryland provisions under which certain losses originating in common elements or outside units may make the deductible a common expense, while certain losses originating in a particular unit may make that owner responsible for the master deductible, subject to a statutory limit. That is a Maryland-specific example, not a rule that applies everywhere. Review the Maryland condominium insurance FAQs and consult counsel about the law that applies to your community.
An HO-6 loss-assessment provision may help with some assessments related to covered losses, but coverage is not automatic for every assessment or every master-policy deductible. Limits, exclusions, the cause of loss, and any special assessment deductible may matter. The California Department of Insurance advises condo owners to consider loss-assessment coverage and check whether earthquake assessments are covered and in what amount in its residential insurance guide.
One Event, Multiple Related Claims
When a single event damages common areas and several units, the association and affected owners may each have claims under different policies. Keep the records connected, but do not treat every damaged item as part of one undifferentiated claim.
A coordinated file should identify:
- Event record: Date, location, incident details, and a consistent description of the affected areas.
- Property map: Common elements, individual units, and any mixed-use or commercial areas.
- Separate damage records: Photos, measurements, repair scopes, invoices, and affected property by area and owner.
- Policy information: Master and HO-6 declarations, relevant forms, limits, deductibles, and endorsements.
- Claim tracking: Claim number, policyholder, insurer contact, submitted documents, and outstanding questions for each claim.
- Association decisions: Meeting records, notices, resolutions, and assessment communications, as applicable.
This organization helps keep the association’s claim distinct from each owner’s claim while showing how the damage relates to the same event. The parties should coordinate access, inspections, repair scopes, and communications without assuming that one claim decision resolves the others.
Mixed-Use Buildings Need an Added Review
A building with residential units and commercial or community spaces may involve different uses, tenants, leases, and insurance arrangements. The association should identify who owns and insures retail areas, offices, shared equipment, signs, and tenant improvements. Business property, business interruption, or rental-income questions may involve separate policies and policy terms.
The property manager or board should also clarify who has authority to report each claim, preserve business records, and coordinate access to affected spaces. Lease terms may affect responsibilities, but interpretation of those terms may require legal counsel.
The Role of a Public Adjuster
A public adjuster may assist an association or a unit owner with documenting damage, organizing estimates, coordinating claim information, and reviewing the insurer’s valuation of the policyholder’s covered loss. The scope of assistance depends on the engagement and applicable law.
Iron Hawk Adjusters represents policyholders, associations and unit owners, not insurers. We provide claims documentation and valuation advocacy. We are not a law firm, do not provide legal advice, and do not guarantee any outcome. Interpretation of governing documents and disputes about whether an association or owner is responsible for a particular repair or deductible may require legal counsel.
General-Information Disclaimer
This article provides general, high-level information. It is not legal or insurance advice and is not a substitute for individualized guidance. Coverage and responsibility depend on the specific policy, governing documents, and applicable law. You should review your policy and consult qualified insurance and legal professionals about your circumstances.
Request a Claim Review
Iron Hawk Adjusters provides organized policyholder support for complex association and unit-owner property claims. An initial conversation involves no obligation or pressure.
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Call 301-936-0617 to discuss a property claim.