HOA Insurance Guide: Master Policy, HO-6, Flood, and Lender Rules

A condo is covered by the association's master policy, your own unit policy, and sometimes a separate flood policy. The declaration decides where one stops and the next begins.

If you are buying a condo or a home in an HOA, the insurance question is spread across at least three policies and four or five documents, and nobody hands you a single page that pulls it together. The master policy belongs to the association. The HO-6 (a condo unit owner's policy) belongs to you. The declaration (also called the CC&Rs) decides the line between them.

Each of those can go wrong on its own. A master policy with a high deductible can leave every owner with a share of the bill after a storm. A lender can decline the loan because the building's coverage falls short of its rules. An HO-6 bought with default limits can pay a small fraction of that storm bill.

This guide is the map. It explains how the layers fit, what each type of lender requires, and where to find the numbers in the packet. Where we have written a deeper piece on one part, the section links to it rather than repeating it.

Who Insures What in a Condo or HOA?

The association insures the building, you insure what the master policy leaves out, and the declaration draws that line for your specific building.

Insurance brokers usually sort master policies into three types. The Washington Office of the Insurance Commissioner publishes plain-language definitions:

• All-in: the master policy covers the exterior and the interior finishes, such as cabinets, fixtures, paint, trim and floor coverings.
• All-in, excluding improvements or betterments: the master policy restores the unit to its original finishes but not to any upgrades an owner added.
• Bare walls (walls out): the master policy stops at the uncovered drywall and subfloor. The owner is responsible for the interior finishes.

These are industry labels. Fannie Mae, Freddie Mac and FHA do not use them. Their rules ask a narrower question: does the master policy cover the interior of the unit and the improvements to it? If not, the buyer needs an HO-6 to fill the gap. The same Washington regulator page notes that coverage for the unit structure "is based on the community's governing documents," so the declaration's insurance article is where you confirm which type your building has.

The Washington page also says owners are responsible for the master deductible under all three types. Whether that holds in your building depends on the declaration and state law; Florida, for example, treats deductibles as a shared common expense.

Florida condos: the split is set by statute

Florida puts the split in law for residential condominiums. Every association must carry adequate property insurance "regardless of any requirement in the declaration," and must redetermine replacement cost at least once every three years, under Fla. Stat. 718.111(11). The association insures the property as originally installed. The owner is responsible for floor, wall and ceiling coverings, electrical fixtures, appliances, water heaters, water filters, built-in cabinets and countertops, and window treatments inside the unit. That rule covers Florida condominiums only, not Florida HOAs of single-family homes.

Single-family HOAs and townhomes

When the governing documents make each owner insure their own house, the owner carries a standard homeowners policy on the dwelling and the association insures the common areas. Townhome communities go both ways, which is why the declaration matters there too. Our comparison of condo and townhouse HOAs covers the two insurance models side by side.

What Does Your Lender Require the Building to Carry?

Fannie Mae and Freddie Mac cap the master deductible. FHA sets coverage minimums but no deductible cap. VA mostly defers to local custom.

Which rulebook applies depends on the loan, not the building. A conventional loan sold to Fannie Mae follows the Fannie Mae Selling Guide. An FHA loan follows HUD Handbook 4000.1. A VA loan follows VA's regulations. The same building can pass one and fail another.

The table covers condominiums. For a Fannie Mae loan on a home in a planned unit development (PUD), the lender checks the owner's own homeowners policy instead, unless the HOA's documents provide a master policy that covers the houses. Your lender can tell you whether it treats your community as a condo or a PUD. FHA's rules apply to condos in a project on its approved list or a unit getting FHA's single-unit approval.

Sources for the table: Fannie Mae Selling Guide B7-3-03, B7-3-04, B7-3-06, B7-4-01 and B7-4-02; HUD Handbook 4000.1 sections II.C.2.c.vii and II.A.8.p (Update 18, August 12, 2026); and 38 CFR 36.4329 and 36.4363. Freddie Mac's Guide section 4703.2 uses the same 5% and $50,000 deductible limits.

Two points in that table get repeated wrong. FHA does not cap the master deductible; the 5% and $50,000 limits are Fannie Mae and Freddie Mac rules. And Fannie Mae's fidelity requirement exempts projects of "20 units or less," so it starts at 21. Our guides to Fannie and Freddie condo rules and HOA red flags that stop FHA and VA loans cover the rest of the project review, and why a condo fails the lender questionnaire shows where insurance answers land on that form.

The Deductible Is the Number That Reaches Owners

The association pays a master deductible, which usually means owners do. A Fannie Mae loan needs it within 5% and $50,000 per unit.

When a storm damages the building, the association pays the deductible before the master policy pays anything. On a building insured for $80 million, a 5% deductible is $4 million per event, and if the association does not have that cash on hand, it can reach owners as a special assessment. Under the Fannie Mae text dated August 5, 2026, a policy must stay within 5% of the coverage amount per occurrence and $50,000 per unit, and a separate windstorm or wildfire deductible has to meet the limit on its own.

Ask the association for the master policy's declarations page and find the deductible for each peril, including any windstorm or named-storm line. Then ask whether the association has cash set aside to cover it or would assess owners.

We cover this in two places. How the condo insurance crisis affects your mortgage explains why carriers pushed deductibles up and how that blocks loans. The September 3 edition of The HOA Report, "The Two Deductible Numbers That Decide Whether a Condo Can Be Financed," walks through both limits against the updated guide, including the deductible buy-back policy an association can use to meet them.

Your HO-6 and Loss Assessment Coverage

Your HO-6 covers what the master policy leaves out, and its loss assessment coverage pays your share of certain building-wide bills.

Fannie Mae requires the borrower to carry an HO-6 when the master policy leaves any part of the interior or improvements uncovered, or when the master policy has a per-unit deductible. The HO-6 must be at least the greater of what it takes to restore the uncovered interior or the per-unit deductible, under B7-3-04.

Loss assessment coverage is the part of an HO-6 that pays your share when the association assesses owners for a loss. The Washington regulator explains the limit on it: if the cause of the damage is covered under your own policy, the assessment for that cause is covered too. An assessment for a cause your policy does not cover generally is not. The same page lists wear and tear and maintenance among the things a condo policy does not cover, so an assessment for long-deferred repairs is unlikely to be paid. Our piece on the HO-6 insurance gap covers how carriers limit this coverage and what to ask your agent.

Florida HO-6 rules: the statute sets a floor, and the declaration or lender sets the requirement

A common line online says Florida law requires condo owners to carry HO-6. The condominium statute does not say that. Section 718.111(11)(g) says only that a unit owner policy must conform to Fla. Stat. 627.714. The requirement to carry one usually comes from the declaration or from the lender.

If you do carry one in Florida, a policy issued or renewed on or after July 1, 2010 must include at least $2,000 of loss assessment coverage, with a deductible of no more than $250. The limit that counts is the one in effect the day before the loss, so raising it after a storm has already hit does not help for that storm.

Flood Insurance on a Condo

In a high-risk flood zone, the association's flood policy has its own cap and pays nothing toward your share of a loss assessment.

Fannie Mae treats flood as a separate requirement from the master property policy. In flood zones beginning with A or V, Fannie Mae requires a condo building with attached units to carry a Residential Condominium Building Association Policy (RCBAP), the association's flood policy from the National Flood Insurance Program (NFIP), or equivalent private coverage, under B7-3-06.

Three facts from FEMA's Flood Insurance Manual (October 2025 edition) matter to a buyer:

• The cap is a ceiling. An RCBAP can insure the building up to the lesser of its replacement cost or $250,000 times the number of units. An association can carry less. Fannie Mae requires only the lesser of 80% of replacement cost or the NFIP maximum per unit, and may then require the owner to carry a supplemental policy. FHA requires the lesser of full replacement cost or the NFIP maximum per unit times the number of units.
• Your own flood policy stacks, to a point. An owner can buy an NFIP dwelling policy on the unit, but the NFIP will not pay more than $250,000 combined for one unit under the two policies.
• The RCBAP has no loss assessment coverage. Only the owner's own flood policy does, and it will not pay the association's flood deductible if the RCBAP is insured to at least 80% of replacement cost.

Before you close, ask the association whether the building is in a flood zone beginning with A or V. If it is, ask for the RCBAP declarations page so you can compare its limit and deductible to your lender's minimum. Then ask your insurance agent whether a flood policy on the unit makes sense.

When the Association's Premium Goes Up

In a 2025 survey, 93% of respondents reported a premium increase at renewal. The board decides if it reaches you as dues, an assessment or reserves.

In an April 2025 survey by the Foundation for Community Association Research, 93% of 509 respondents across 39 states, mostly board members and managers, said their property and casualty premium went up at the last or current renewal, and 29% said the insurer forced high or per-unit deductibles. Respondents chose to take part, so the figures describe the people who answered.

The broader market has softened since. The Council of Insurance Agents & Brokers reported commercial property premiums down 6.3% on average in the second quarter of 2026. That figure covers commercial property accounts in general and is not specific to condo associations, and a coastal building can still renew higher.

Two of our pieces pick up from here. What an HOA insurance increase actually costs you traces the four routes a premium increase takes to owners and the budget line that shows which one the board used. What your insurance carrier is about to ask your board covers the documents a carrier reviews at renewal, which double as a buyer's read on how well the building is kept.

Where Insurance Shows Up in the Documents

The declaration sets who insures what. California requires an insurance summary for buyers; Florida's resale documents include none.

The declaration's insurance article

This is where the coverage type, the owner's responsibilities and the handling of deductibles are written down. Read it before you price your HO-6, because it tells your agent what the unit policy has to cover. Our free CC&R analysis tool pulls out the insurance provisions along with the rest of the declaration.

In Florida condos, deductibles and damage above the coverage are a common expense of all owners, meaning a cost every owner shares, which can reach you as an assessment. The exception is damage caused by the negligence, intentional conduct or rule violation of an owner or the owner's family, tenants or guests, under 718.111(11)(j). A majority of all voting interests can opt out and use the declaration's own allocation instead, and the opt-out has to be recorded, under 718.111(11)(k) and (m). Ask whether one has been.

California: an insurance summary reaches the buyer

California associations must include a summary of their property, general liability, earthquake, flood and fidelity policies in the annual budget report, with the insurer, type, limit and deductible for each, under Cal. Civ. Code 5300(b)(9). The seller must give that report to the buyer under Civ. Code 4525(a)(3). If a policy lapses or the deductible rises during the year, the association must notify members under Civ. Code 5810, so ask whether any such notice has gone out since the last report.

Florida: you have to ask for it

The list of documents a Florida condo buyer is entitled to under Fla. Stat. 718.503(2) includes the declaration, budget and financial statement but no insurance document. The estoppel certificate (the payoff-and-status letter the title company orders from the association) only has to give contact information for the association's insurance, under 718.116(8)(a). The limits and deductibles have to be requested from the association or its manager.

The certificate of insurance and the declarations page

Lenders accept a certificate of insurance showing the unit is covered by the master policy, under Fannie Mae B7-3-07. For your own review, also ask for the declarations page of each association policy. California lets associations meet its summary requirement by handing out copies of those pages, to the extent the pages show the insurer, limit and deductible.

A related read: what a condo resale certificate tells you.

What to Ask Before You Close

Ask the association for policies and deductibles, your agent for an HO-6 matched to them, and your lender whether the building qualifies.

Ask the association or manager:

• The declarations page for the master property, liability, fidelity, flood and any earthquake policy.
• The deductible for each peril, including any separate windstorm or named-storm deductible, and whether any of it is per unit.
• Whether the master policy is bare walls, all-in, or all-in excluding owner improvements, and the section of the declaration that says so.
• Whether the building is in a flood zone beginning with A or V, and if so the RCBAP limit and deductible.
• Whether any assessment is pending or planned to cover a premium increase or an uninsured loss.

Ask your insurance agent:

• What HO-6 limit restores the interior the master policy leaves out, given the declaration's insurance article.
• How much loss assessment coverage the policy includes, and whether the carrier limits what it pays toward a master deductible.
• Whether a separate flood policy on the unit makes sense for this building.

Ask your lender: whether the master policy's coverage amount and deductibles meet the requirements for your loan type, and whether the lender needs anything from the association beyond a certificate of insurance. For questions about your rights under the declaration or a specific claim, a real estate attorney in your state is the right call.