Condo Master Policy vs HO-6: Who Covers What in Florida

Two policies, one building

A condo owner lives under two insurance policies at once. The association buys a master policy for the building and pays for it out of the budget your dues fund. You buy your own unit owner policy, usually called an HO-6, for what the master policy leaves out.

The Florida Department of Financial Services describes the HO-6 as a form that “provides some coverage for the structure but primarily covers the personal property and liability of the insured.” It adds that unit owner policies normally cover named perils, and that an endorsement can broaden them (DFS homeowners insurance overview). The Insurance Information Institute notes that the master policy covers shared areas such as the roof, elevators and walkways, and that the split between the two policies varies from building to building (Triple-I).

In Florida, much of that split is set by statute. That helps, because the same rules apply to every residential condominium, but your declaration still matters for anything the statute leaves open.

What Florida law puts on the master policy

Section 718.111(11) applies to every residential condominium in Florida, whatever the date of its declaration. Every association must carry adequate property insurance. The amount may be based on replacement cost from an independent insurance appraisal or an update, and replacement cost must be determined at least once every 3 years.

Under s. 718.111(11)(f), every association property policy issued or renewed on or after January 1, 2009, must give primary coverage for:

• All portions of the condominium property as originally installed, or replacement of like kind and quality, following the original plans and specifications.
• Alterations or additions made to the condominium property or association property under s. 718.113(2).

When an insurable event damages property the association must insure, the association repairs it as a common expense. The master policy deductible and any damage above the association’s coverage are common expenses too, shared by all owners, unless an owner’s negligence or rule violation caused the damage (s. 718.111(11)(j)).

Who usually insures what in a Florida condo

What your HO-6 is for

The same paragraph of the statute tells the master policy what to leave out. It must exclude these items when they are inside your unit and serve only your unit, and it makes them, and the insurance on them, your responsibility:

• Floor, wall and ceiling coverings.
• Electrical fixtures, appliances, water heaters and water filters.
• Built-in cabinets and countertops.
• Window treatments, including curtains, drapes, blinds and their hardware.
• All personal property in the unit.

Upgrades are the other big item. The association is not obligated to pay to repair improvements that a current or former owner installed, if they benefit only that unit and were not part of the developer’s standard construction (s. 718.111(11)(n)). If you remodeled the kitchen or replaced the floors, the HO-6 is where that value belongs.

Florida also says every unit owner policy is excess over any other policy covering the same property (s. 627.714(4)). In practice, your HO-6 responds after the master policy for anything both could touch. Check your declarations page for your dwelling limit, personal property limit, loss of use and deductible.

Loss assessment coverage and its deadline

When the master policy does not pay the whole cost of a covered loss, for example because of a large hurricane deductible, the board may assess every owner. Loss assessment coverage on your HO-6 pays your share, up to its limit.

Florida requires every unit owner policy issued or renewed since July 1, 2010, to include a minimum amount of loss assessment coverage, with a cap on the deductible that applies to it, for assessments from a direct loss of the type your own policy covers (s. 627.714(1)). Three more rules shape the payment:

• The limit that applies is the one in force 1 day before the loss. Raising it after a storm is on the way does not help with that storm (s. 627.714(2)).
• The insurer does not have to pay more than your limit for one direct loss, however many assessments the board levies (s. 627.714(3)).
• No deductible applies to the assessment if one was already applied to your other damage from the same loss (s. 627.714(1)).

The notice deadline is its own clock. Notice of a loss assessment claim must reach your insurer by the later of 1 year after the date of loss or 90 days after the board votes to levy the assessment, and never later than 3 years after the loss (s. 627.70132(4)). Check the limit on your declarations page and ask your agent whether a higher one fits your building before storm season. Our after-hurricane-season deadlines page quotes the rule in full.

Water from another unit, flood and other gray areas

Water from another unit raises some of the hardest questions in a condo. Usually it splits along the same line as everything else: the association handles the parts of the building it insures, and each owner’s HO-6 handles their own finishes, cabinets and belongings. If the leak came from an owner’s, tenant’s or guest’s negligence or rule violation, that owner is responsible for repair costs insurance does not pay, including other owners’ personal property (s. 718.111(11)(j)1. and 2.).

Two more things can shift the line. An association may vote, by a majority of the total voting interests, to opt out of the statutory repair cost rules and use its declaration instead, and it must record that vote (s. 718.111(11)(k) and (m)). And the association does not have to pay as a common expense for a loss an owner knew about but did not report until after the association’s claim was settled or denied as untimely (s. 718.111(11)(j)4.). Report water damage to the board in writing the day you find it.

Flood is separate. FEMA notes that a standard property policy typically does not cover flood, and that associations can buy a National Flood Insurance Program policy for the building and should encourage owners to buy their own flood coverage (FEMA condominium flood brochure). Florida law lets, but does not require, an association to buy flood insurance (s. 718.111(11)(e)). The wind vs flood coverage guide explains how mixed storm losses are split.

The unit-by-unit split above is condominium law. In an HOA, the declaration and the policies decide who insures what, so start there; our HOA claims page covers those losses. If your building has damage now, the condo association claim steps walk a board through the first weeks, and our condominium association claims page shows how we document a building.