Master policy

A master policy is an insurance contract purchased by a homeowners association (HOA), condo board or co-op to cover shared spaces, structures and common liabilities for all members of a community. If you live in a condominium or belong to a homeowners association, this policy plays a key role in determining which parts of the property are already insured and what you still need to insure yourself.

In simple terms, the master policy covers the collective parts of the building or community that multiple people use or benefit from. This might include the roof, stairwells, exterior walls or shared amenities like pools and gyms.

Understanding how the master insurance policy works is essential when buying a condo, reviewing your HOA documents or setting up your own insurance. It defines the boundary between what is insured by your association and what is your personal responsibility.

What is covered under a master policy?

Before you set up your own condo insurance, it helps to know exactly what the master policy already covers. This coverage typically focuses on the parts of the property shared by everyone in the community, not what's inside your individual unit. Knowing these details helps you to not over- or under-insure your space. It also helps you avoid surprises when damage happens and you're trying to figure out who pays for what.

A master policy typically covers:

• The building's exterior – Covers structural elements like the roof, foundation and outer walls.
• Shared walkways and structures – Includes hallways, staircases, elevators and other shared access points.
• Common recreational areas – Covers spaces like pools, gyms and clubhouses used by all residents.
• Shared systems – Protects shared plumbing, electrical or HVAC systems that serve multiple units.
• General liability – Covers injuries that occur in common areas, such as lobbies or walkways.

Think of it as a group insurance policy that protects the parts of the property everyone shares. The goal is to confirm consistent protection for the structure and community areas without requiring every unit owner to purchase separate policies for these spaces.

Types of master insurance policies

There are three main types of master policies that you might encounter in a condominium or co-op community. Each one handles coverage differently, so it is important to know which type your HOA has in place.

• Bare walls coverage – Covers the building's shell and shared areas only. Everything inside your unit—including drywall, flooring, fixtures and appliances must be insured under your own HO-6 policy.
• Single entity coverage – Extends to original interior features like cabinets and countertops. Renovations or upgrades you've added still need to be covered through your personal policy.
• All-in coverage – Covers shared areas and standard interior finishes and sometimes includes limited upgrades. Personal property like furniture and electronics is still your responsibility.

Master policy vs HO-6 policy

Even if your HOA has a master insurance policy, you still need your own coverage. That's where an HO-6 condo insurance policy comes in. It covers the areas and belongings that the master policy does not. Your HO-6 policy should include:

• Interior walls, ceilings and floors – Depending on the master policy, your HO-6 may need to cover these.
• Personal property – Includes clothing, electronics, furniture and other belongings.
• Improvements – Covers upgrades, renovations or remodeling work you've done.
• Loss of use – Pays for temporary housing if your condo becomes unlivable due to a covered loss.
• Personal liability – Helps pay for medical costs or legal expenses if someone is hurt due to your actions.

The two policies work together. The master policy protects the community property and common structure, while your HO-6 policy protects what's inside your walls and your financial liability.

How to review a master policy

If you live in a condo or are part of a managed HOA, request a copy of the master policy from your board or property manager. Carefully review:

• Policy type – Is the master policy bare walls, single entity or all-in?
• Interior coverage – Does the policy include interior fixtures and finishes?
• Deductibles – How high are they and how are they shared or passed on to unit owners?
• Exclusions – Are there scenarios the policy doesn't cover?
• Multiple-unit damage – What happens if several units are affected in the same incident?

This review helps you determine what your personal policy should include. For example, if your master policy only covers the bare walls, your HO-6 policy will need to account for everything from paint to appliances.

Who pays the deductible on a master policy?

The HOA or condo board is responsible for paying the master policy deductible. However, in practice, the cost may be passed on to individual unit owners if the damage originated in or is limited to one unit. This is something to ask about when reviewing your HOA rules.

Some HO-6 policies allow you to add loss assessment coverage, which helps pay your share of a master policy deductible if you are required to contribute.

Real-world example

Imagine a pipe bursts behind a shared wall between two units, causing water damage to your neighbor's ceiling and your kitchen flooring. The master policy may cover the plumbing repairs and structural damage, but your HO-6 policy would pay for replacing your cabinets and appliances, especially if they were custom upgrades. If your building has bare walls coverage, all of the interior repair costs would fall under your personal policy.

This is why knowing where the master insurance policy stops and your own responsibility begins is so important.

FAQ

Do I still need insurance if my condo has a master policy?

Yes, you absolutely do. A master policy only covers the shared parts of the building and certain structural elements, depending on the type. It doesn't protect your personal belongings, liability or many interior features of your unit. Without an HO-6 policy, you could be left covering major repair or replacement costs out of pocket.

What's the difference between loss assessment and a regular deductible?

A deductible is the amount the HOA must pay out-of-pocket before the master policy kicks in. If the HOA charges unit owners to help pay that deductible, it becomes a loss assessment. Some condo insurance policies offer loss assessment coverage to help cover your share, so you're not stuck with an unexpected bill if there's shared damage.

How do I find out what type of master policy my building has?

Start by asking your HOA board or property manager for a copy of the insurance declarations page. This document outlines the type of coverage bare walls, single entity or all-in, as well as any exclusions and deductible details. Understanding what's included will help you work with your insurance provider to fill in the gaps with your personal policy.