Understanding Condo Insurance Coverage
What Owners and Associations Need to Know
Condominium insurance is one of the most commonly misunderstood aspects of property ownership. Whether you are a unit owner, landlord, or part of a condominium association, understanding how insurance coverage works — and where responsibilities begin and end — is critical to protecting your investment.
At PhillyLiving Management Group, we believe informed owners make better decisions. Below is a general overview of how condominium insurance typically works and how an association’s Master Insurance Policy and an individual unit owner’s policy are designed to work together.
What Is a Condo Association Master Insurance Policy?
Most condominium associations carry a Master Insurance Policy that provides coverage for shared aspects of the property. While coverage varies based on governing documents and policy terms, a Master Policy generally insures:
● The building structure
● Common elements such as hallways, roofs, and shared spaces
● In some cases, original building components within individual units
Master Policies are subject to deductibles, which can be significant. In many situations, the policy only responds once covered damage exceeds the deductible amount.
Where Unit Owner Responsibility Typically Applies
One common area of confusion involves what happens when damage falls below the Master Policy deductible. In many cases, repairs below that threshold may become the responsibility of the unit owner.
Additionally, upgrades, renovations, and betterments made inside a unit — such as flooring, cabinetry, or customized finishes — are often not covered by the association’s Master Policy. Coverage for these items typically falls to the individual owner or landlord.
Understanding these distinctions ahead of time can help prevent unexpected costs and disputes after a loss occurs.
Why an HO-6 Policy Is Important for Condo Owners and Landlords
Because of the potential gaps between association coverage and personal responsibility, condominium unit owners are strongly encouraged to carry a Condominium Unit Owner’s Insurance Policy, commonly referred to as an HO-6 policy.
An HO-6 policy is generally designed to help provide coverage for:
● Interior building components not fully insured by the Master Policy
● Upgrades, improvements, and renovations within the unit
● Personal property and contents
● Personal liability for incidents originating within the unit
● Additional living expenses if the unit becomes temporarily uninhabitable due to a covered loss
For landlords, this coverage can be especially important in protecting rental properties and minimizing financial disruption.
Insurance Coverage Is Not One-Size-Fits-All
Condominium insurance coverage can vary widely depending on:
● The association’s governing documents
● The terms, limits, and deductibles of the Master Insurance Policy
● The coverage selected under an individual HO-6 policy
For this reason, owners and landlords should periodically review their insurance needs with a licensed insurance professional to ensure their coverage aligns with the association’s insurance structure and reflects any changes to the unit. If you’re looking for a trusted referral, contact us.
A Proactive Approach to Risk Management
Clear communication and proactive education around insurance responsibilities benefit everyone involved. When owners understand how condominium insurance generally works, it helps:
● Reduce confusion after insurance claims
● Set realistic expectations for repairs and responsibility
● Minimize disputes, speed up recovery after losses, and help maintain a stable, well-functioning community
At PhillyLiving Management Group, we are committed to helping associations and property owners maintain well-managed, well-protected communities through education, transparency, and thoughtful management practices. If you have any questions, please contact us.
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