Achieve peace of mind and ensure protection with condo building insurance.
Owning or managing a condominium building comes with unique insurance needs that require a clear understanding of coverage responsibilities. Whether you’re a condo association representative or an individual unit owner, knowing the different levels of coverage available is essential to ensuring proper protection for your investment. At Copeland Insurance Agency, we specialize in helping Kansas condo owners and associations find the right policies to protect their properties.
Understanding Condo Insurance: Coverage Levels and Responsibilities
Condo insurance is designed to cover both shared and individual responsibilities within a condominium community. Since multiple parties are involved—such as the condo association, individual owners, and sometimes tenants—having the correct type of insurance policy is critical to avoiding coverage gaps that could lead to financial losses in the event of property damage, liability claims, or unforeseen incidents.
There are four primary types of insurance policies for condominium buildings:
Association Master Policy – Covers shared spaces and structural components as determined by the association’s governing documents.
Bare Walls Coverage – Provides minimal coverage, protecting only the basic structure of each unit while leaving individual owners responsible for interior elements.
Modified Single Entity Coverage – Extends coverage beyond bare walls to include fixtures and installed appliances.
Single Entity Coverage – Covers standard unit finishes, but excludes personal property or upgrades made by individual owners.
Each of these coverage types plays a critical role in safeguarding different aspects of the condominium complex. Below, we break down each policy in greater detail to help condo owners and associations make informed decisions about their insurance needs.
1. Association Master Policy
The Association Master Policy is the primary insurance policy purchased by the condominium owners’ association (COA). This policy typically covers the common areas and shared elements of the condo building, such as:
Building Exteriors (roofs, siding, and structural components)
Hallways, Elevators, and Lobbies
Shared Amenities (such as pools, fitness centers, and clubhouses)
Landscaping and Parking Areas
The extent of coverage under an association master policy depends on the policy type chosen by the COA. Some policies may only cover the building’s exterior and common areas, leaving unit owners responsible for insuring everything inside their units. Others may include additional coverage for interior structural elements.
2. Bare Walls Coverage
Bare Walls Coverage is a minimal insurance policy that covers only the basic structure of each condo unit. This means that the policy applies only to the following:
Walls
Floors
Ceilings
With this type of coverage, individual unit owners must purchase their own HO-6 insurance policies to cover everything inside their units, including:
Fixtures (cabinets, countertops, light fixtures, plumbing fixtures, etc.)
Flooring (carpet, tile, or hardwood flooring)
Built-in appliances (stoves, dishwashers, etc.)
Personal belongings (furniture, electronics, clothing, etc.)
Since bare walls coverage is the most limited option, unit owners should work with their insurance provider to ensure they have adequate coverage for everything inside their unit.
3. Modified Single Entity Coverage
Modified Single Entity Coverage, also known as all-in coverage, offers a more comprehensive level of protection. In addition to covering the basic structural components of each unit, this policy typically extends to:
Built-in appliances (such as refrigerators and dishwashers)
Standard fixtures and fittings (such as cabinetry, countertops, and bathroom fixtures)
Upgrades and improvements made by previous owners (as long as they are within policy guidelines)
However, this policy does not cover personal property, meaning unit owners must still have an HO-6 policy to protect their belongings. It’s important for condo owners to review the association’s policy carefully to determine what level of coverage is provided and whether additional personal insurance is necessary.
4. Single Entity Coverage
Single Entity Coverage is similar to modified single entity coverage but does not include any owner-made upgrades or renovations. This policy typically covers:
Original construction elements (such as walls, ceilings, floors, and doors)
Standard finishes installed by the builder (such as cabinets and bathroom fixtures)
Common areas shared by all residents
Any changes or improvements made by individual owners—such as custom kitchen upgrades, new flooring, or enhanced bathroom fixtures—would not be covered under this policy. Unit owners should carry a separate HO-6 policy to cover their personal upgrades, belongings, and liability.
How to Choose the Right Condo Insurance Policy
The type of coverage needed for a condominium depends on the following factors:
The condo association’s bylaws and master policy – Understanding what is covered under the master policy helps determine what additional coverage owners need.
The value of personal belongings and unit upgrades – Condo owners should consider how much protection they need for furniture, appliances, and renovations.
Potential risks and liabilities – Ensuring coverage for events like fire, water damage, or theft is crucial for financial protection.
Why Choose Copeland Insurance Agency for Your Condo Insurance Needs?
At Copeland Insurance Agency, we understand the complexities of insuring condominium properties. Whether you’re a condo association looking for a master policy or a unit owner seeking the right level of protection, our experienced team can help you navigate the options and find the best coverage tailored to your needs.
Why work with us?
Expert Guidance: We help you understand your coverage options and identify potential gaps in protection.
Comprehensive Policies: Our insurance plans are designed to protect both condo associations and individual unit owners.
Personalized Service: We work closely with each client to ensure their policy fits their specific needs and budget.
Reliable Claims Assistance: If an incident occurs, our team is here to help you with the claims process and ensure a smooth resolution.
Commercial Umbrella Insurance
Risk Factor
What happens when your condo or co-op building faces a large liability loss that exceeds the basic limit of your standard policy?
Solution
A commercial umbrella policy will provide extra coverage over and above general liability, directors and officers liability, auto liability, and employers liability policies. Limits start at $1,000,000 and go as high as $200,000,000.
Systems Breakdown Insurance
Risk Factor
With technology performing many tasks in today's world, a breakdown can cause a significant financial burden, including the cost to repair the equipment and any resulting lost income or extra expenses.
Solution
Comprehensive coverage provides protection against equipment mechanical breakdown for machinery such as heating and cooling equipment and elevator motors.
Property Insurance
Risk Factor
Condo and co-op associations may face severe financial consequences from property loss due to fire, wind, or other causes.
Solution
Commercial property insurance should provide coverage for damage to the building, personal property owned by the association, and income lost due to a covered cause of loss.
Sponsor / Investors Owned Units Insurance
Risk Factor
Typically the policies for the association exclude coverage for the sponsor or holder of unsold shares for the interior of the units they own.
Solution
A policy should be maintained to provide coverage for what you are responsible for within the unit, as well as any lost income and lawsuits resulting from acts within the unit.
Directors and Officers Liability Insurance
Risk Factor
Directors and officers (such as board members) can be held accountable for decisions they make in the performance of their duties. Any resulting lawsuits are typically expensive to defend and can result in potentially large settlements.
Solution
Directors and officers liability insurance provides coverage for the legal costs to defend a covered lawsuit and may also provide the money necessary for any resulting judgments.
General Liability
Risk Factor
Condo and co-op associations are susceptible to many risks, such as claims due to bodily injury, property damage, personal injury, and more. The association could also face lawsuits from claims associated with common areas such as hallways, stairwells, swimming pools, and parking areas.
Solution
General liability insurance is an absolute necessity for any association. It provides coverage for legal fees and judgments when the association is named in a covered lawsuit.
Environmental Insurance
Risk Factor
Pollutant clean-up is generally excluded from the basic policies. Leaking of a fuel tank can be very costly to remediate.
Solution
Environmental insurance provides coverage for clean-up costs and third party lawsuits as a result of a leak from the tank or related pipes.
Cyber Liability Insurance
Risk Factor
Technology has spun a whole new web of liability exposures including the need for protection of privacy, data, and financial information for your association residents. Breach of their data can result in costly fees and lawsuits for the association if held liable.
Solution
Cyber liability coverage covers fees and lawsuits resulting from the breach of personal data, assuming that the association is liable.
Crime and Fidelity Bond Insurance
Risk Factor
Crime and fidelity bond insurance is designed to provide coverage to cooperative and condominium associations to protect them from theft of funds or association-owned personal property by an employee, board member and in some cases, the property management firm.
Solution
Crime and fidelity coverage is designed to provide coverage for employee dishonesty, forgery and alteration, computer fraud, counterfeiting, and more.
Insurance for condominium buildings safeguards your real estate investment.
Frequently Asked Questions (FAQs)
A condo association’s master policy typically covers common areas such as hallways, elevators, stairwells, lobbies, parking lots, and exterior features like roofs and landscaping. Depending on the type of policy, it may also cover structural components of individual units. However, personal belongings, upgrades, and liability within individual units are generally not covered and must be insured by the unit owner through an HO-6 policy.
- Bare Walls Coverage: Covers only the walls, floors, and ceilings of a unit, leaving the owner responsible for insuring fixtures, appliances, and personal belongings.
- Single Entity Coverage: Extends to standard built-in fixtures like kitchen cabinets and bathroom fixtures but does not cover upgrades made by the owner.
- All-In (Modified Single Entity) Coverage: Covers original construction materials, standard finishes, and some improvements, but not personal property.
Each condo association selects the level of coverage in their master policy, which determines what individual owners need to insure.
Yes. While the association’s master policy covers common areas and possibly some unit components, individual owners still need a condo (HO-6) insurance policy to protect their personal belongings, liability, and any improvements or upgrades they have made to their unit. HO-6 insurance also helps cover loss assessment fees that may be charged to owners for damages that exceed the master policy’s coverage.
It depends on the cause of the water damage. Most master policies cover water damage from sudden and accidental events, like a burst pipe in a common area. However, they may not cover gradual damage from leaks or flooding. Individual owners should review their HO-6 policy for coverage related to internal plumbing issues, sewer backups, or water damage from neighboring units.
If damages exceed the limits of the master policy, the condo association may issue a special assessment fee to cover the remaining costs. This means individual owners may have to pay out of pocket. To help protect against this risk, owners can purchase loss assessment coverage as part of their HO-6 insurance policy, which helps cover their share of the costs if the master policy falls short.