One of the most common — and most consequential — sources of confusion in South Florida's condo world is the relationship between the association's master insurance policy and a unit owner's individual HO-6 policy. After a loss, many unit owners in Miami, Fort Lauderdale, and Boca Raton are shocked to discover that the association's policy doesn't cover what they assumed it would. Understanding where one policy ends and the other begins is essential for every board member and every unit owner in Florida.
The short version: The master policy covers the building and common areas. The HO-6 covers what’s inside your unit. But the real answer is more nuanced — and getting it wrong is expensive.
What the Master Policy Covers
The condominium association’s master policy is a commercial property policy that insures the building structure, common areas, and association-owned property. However, exactly what it covers beyond that depends on which of three coverage types the association has chosen:
Bare Walls-In Coverage
This is the most limited form of master policy coverage. It covers the building structure — the concrete, framing, roof, and common systems — but nothing inside the unit walls. Fixtures, flooring, cabinetry, appliances, and any improvements made by the unit owner are completely excluded. Unit owners in bare walls buildings need robust HO-6 policies to cover everything from the drywall in.
Single Entity (Original Specifications) Coverage
This covers the building plus the original fixtures and finishes as they were when the building was first built — standard builder-grade materials. If a unit has been renovated or upgraded since original construction, those improvements are not covered by the master policy. The unit owner is responsible for insuring any upgrades through their HO-6.
All-In Coverage
The most comprehensive master policy type, all-in coverage extends to all original and improved fixtures within the unit — flooring, cabinetry, built-in appliances, and other permanent fixtures. This is the most favorable for unit owners, as it reduces the gap between what the master policy covers and what the HO-6 needs to pick up.
Many unit owners don’t know which type their association has. If you’re a board member, make sure this is clearly communicated to owners. If you’re a unit owner, ask your association or review the master policy declarations page.
Master Policy vs. HO-6 At a Glance
| Coverage Area | Master Policy | HO-6 (Unit Owner) |
|---|---|---|
| Building structure & roof | ✓ Yes | ✗ No |
| Common areas & amenities | ✓ Yes | ✗ No |
| Association-owned equipment | ✓ Yes | ✗ No |
| Original fixtures (bare walls) | ✗ No | ✓ Yes |
| Unit improvements & upgrades | Depends on policy type | ✓ Yes (if scheduled) |
| Personal property & furniture | ✗ No | ✓ Yes |
| Loss of use / additional living expenses | ✗ No | ✓ Yes |
| Personal liability | Common areas only | ✓ Yes (within unit) |
| Master policy deductible assessment | ✗ Not covered | ✓ Yes (loss assessment coverage) |
The Deductible Gap — One of the Biggest Risks
One of the most overlooked exposures for unit owners involves the master policy deductible. In South Florida, where windstorm deductibles are typically 2–5% of insured value, the master policy deductible on a large building can easily reach $500,000 to several million dollars. When a covered loss occurs, that deductible doesn’t just disappear — the association can assess it back to unit owners.
If a hurricane causes $3 million in damage and the master policy has a $1 million windstorm deductible, the association may assess each unit owner their proportionate share of that deductible — potentially tens of thousands of dollars per unit. A properly structured HO-6 policy includes loss assessment coverage to protect against exactly this scenario.
Action item for unit owners: Check that your HO-6 includes loss assessment coverage with a limit high enough to cover your share of the master policy deductible. A $1,000 loss assessment limit won’t help much if your share of a windstorm deductible assessment is $25,000.
Water Damage: The Gray Area
Water damage claims are where the master policy / HO-6 boundary gets most contentious. Here are the most common scenarios and how coverage typically works:
- Pipe bursts inside your unit: Your HO-6 covers damage to your unit contents and fixtures. If water damages the unit below, your HO-6 liability coverage may apply.
- Pipe bursts in a common area: The master policy covers damage to common elements. Damage to your unit from the common-area pipe may fall to the master policy or your HO-6 depending on the association’s documents and the policy language.
- Roof leak into your unit: The master policy covers the roof repair. Damage to your unit contents and finishes typically falls to your HO-6.
- Neighbor’s washing machine floods your unit: Your neighbor’s HO-6 liability coverage should respond, but if they don’t have adequate coverage, your HO-6 would be your backstop.
What a Good HO-6 Policy Should Include
HO-6 Coverage Checklist for South Florida Condo Owners
- Dwelling coverage (Coverage A) adequate to rebuild your unit interior from bare walls
- Personal property coverage for furniture, electronics, clothing, and valuables
- Loss of use / additional living expenses if your unit becomes uninhabitable
- Personal liability coverage (minimum $300,000 recommended)
- Loss assessment coverage with limits matching potential master policy deductible exposure
- Building additions and alterations coverage for any improvements you’ve made
- Water backup coverage (sewer/drain backup is often excluded from standard policies)
- Flood insurance if your building is in or near a flood zone
A Note for Board Members
As a board member, you have a responsibility not just to maintain the master policy but to help unit owners understand how it interacts with their individual coverage. Consider:
- Including a summary of the master policy type (bare walls, single entity, or all-in) in your welcome packet for new owners
- Communicating the master policy deductible clearly so owners can size their loss assessment coverage appropriately
- Inviting Peter to present to your community — explaining the coverage boundary in plain language reduces disputes and surprises after a claim
The master policy / HO-6 boundary is one of the most important things both boards and unit owners can understand. Getting it right before a loss — not after — is what protects everyone. If you have questions about your association’s master policy or want to review how it interacts with unit owner coverage, reach out any time.