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For residents and HOA board members, there seems to be a lot of lingo when it comes to insurance. How do you know which policies cover which property? How do you know what insurance requirements to make when managing an association? We’ve explained the “walls out” and “walls in” policies to help you understand what each one covers.

Master Policy

This policy is also known as the HOA insurance policy and covers liabilities or damages in common areas or on the exterior of your home. The term “walls out” can also be used to describe what the master policy will cover.

However, this doesn’t mean that absolutely everything on the exterior will be covered; if a storm results in extensive damage, residents will have to help pay the association’s deductible. This is what’s known as loss assessment, and it’s a good idea to add this to your HO6 policy so you’re not paying out of pocket.

In addition to exterior damages, the master policy also covers liabilities in common areas. If someone were to slip by the pool and decided to sue the HOA, the liability portion of the policy would protect residents from having to pay special assessments for lawsuit fees.

HO-6 Insurance

Your HOA’s master policy isn’t going to cover your personal property, or anything “walls in.” If you live in a condo or any other shared space, you’re going to need HO-6 insurance. Besides insuring your personal belongings, your association’s master policy won’t likely cover anything inside the bare walls of your unit. You would be responsible for getting coverage for unit structural items such as:

  • Carpeting, ceramic tiles, hardwood floors
  • Plumbing fixtures
  • Light fixtures
  • Built-in appliances
  • Kitchen cabinets
  • Wall coverings

And, as mentioned previously, it’s a good idea to add loss assessment coverage to your HO-6, if not already required by your association.