What's the difference between condo insurance and HOA master policy?

Complete Guide to Condo Insurance vs. HOA Master Policy

Why This Question Matters for Colorado and Utah Residents

This issue is critical for Colorado and Utah condo and townhome owners due to:

• High local risks: Colorado ranks second in the nation for hail claims, and the Front Range has seen a 57% increase in premiums over five years. Both states face wildfire, water damage, and special assessment exposures seldom found elsewhere.
• Complex master policies: Many Colorado HOAs use "bare walls" master policies, leaving owners responsible for interior finishes and fixtures. HOA deductibles in CO/UT are often $10,000–$25,000 or higher per claim, leading to costly assessments.
• Frequent coverage gaps: Nearly 68% of Northern Colorado condo owners have inadequate loss assessment protection for common area claims; this trend is similar in urban areas of Utah.

What Most People Get Wrong

Many believe the HOA policy covers everything, but master policies in CO/UT often stop at the walls or basic structure. Owners mistakenly assume personal belongings or interior upgrades are protected—even when the HOA's responsibility ends at drywall. Others overlook high HOA deductibles, risking four- or five-figure assessments after storms or fires.

Another common mistake: not adding water backup or sewer coverage, which is required in Fort Collins and other flood-prone Colorado cities due to new regulations and the prevalence of water claims.

The Complete Picture

Condo insurance (HO-6-type policies) are tailored for unit owners. They protect what’s inside your four walls—walls, flooring, cabinets, appliances, and personal property. They also include personal liability and additional living expense if you’re temporarily displaced by a claim. Loss assessment coverage is a must-have: if your HOA levies an assessment for a high master policy deductible (common after hail damage or fire), loss assessment coverage on your individual policy can pay your share (often $2,500–$15,000 in CO/UT).

The HOA master policy typically handles rebuilding the building shell, roof, and any common areas (hallways, pool, roof). However, where that protection ends varies with each community, so reviewing your actual HOA documents and master policy is essential. Colorado law mandates "walls-in" coverage by individual owners, and recent legal rulings require explicit water backup coverage in many associations.

Due to rising severe weather claims, Utah HOAs are also shifting to higher deductibles—and owners without proper personal coverage face special assessments and repair costs out-of-pocket.

Making the Right Decision for Colorado and Utah Residents

Question 1: Do I fully understand what my HOA master policy does and does NOT cover?

Don’t rely on assumptions—review these details with your HOA or insurance advisor:

• Bare walls vs. all-in: Does your master policy stop at drywall or include flooring and fixtures?
• Deductible amount: Is your assessment coverage high enough for HOA deductibles (often $10,000-$25,000)?

Question 2: Do I have endorsements for my real-world risks?

Climate and regulations in CO/UT mean you may need these extras:

• Water backup coverage if you’re in a floodplain or multi-story building (required in Fort Collins and highly recommended elsewhere)
• Loss assessment coverage matching or exceeding your HOA’s deductible
• Wildfire, hail, or mudflow coverage if you’re near high-risk zones (e.g., Boulder, Park City, Estes Park)

Question 3: Am I prepared for special assessments or temporary relocation?

Many owners underestimate out-of-pocket costs after shared property losses. Check if your policy covers loss assessments and additional living expenses, especially with high rebuilding costs in CO/UT (+29% higher than national average for reconstruction).