What is a master policy?

A master policy is the HOA’s own property insurance, covering the structures and common areas the association owns, not what’s inside individual units. How far it reaches varies by community: some master policies take a “bare walls” approach and stop at the unfinished structure, while others use a “single entity” approach that extends further, covering fixtures or even improvements a homeowner has made inside their own unit.

Why does a master policy matter?

Not knowing exactly where the master policy’s coverage ends is how residents get blindsided after a fire or a storm, assuming something was covered that never was. Interior finishes, personal belongings, betterments, and loss assessment coverage typically fall outside the master policy and need to be picked up by an owner’s own HO-6 policy, and flood damage is usually excluded entirely unless the owner carries separate coverage through a program like FEMA’s National Flood Insurance Program. Boards need to check that the policy doesn’t contradict what the governing documents promise, and residents need to know if they need their own coverage to fill the gap.

When You’ll Run Into This

This gets reviewed closely during the HOA’s annual insurance renewal, and again immediately after any incident involving shared property. Our guide on what every board member should know about HOA insurance covers what a solid master policy should include.