Understanding Utah HOA Insurance: Master Policies vs. HO-6 Policies
For homeowners living in an HOA community, understanding how insurance works can be confusing. Many residents aren’t sure what their HOA’s master policy covers versus what they need to insure themselves. In Utah, where planned communities and condominiums are common, knowing the difference between an **association’s master policy** and an individual **HO-6 policy** is essential for protecting your home and finances.
What is an HOA Insurance Master Policy?
An HOA master insurance policy is a policy purchased by the homeowners association to cover shared property and common areas. The level of coverage varies based on the HOA’s governing documents and the type of community (single-family homes, townhomes, or condominiums).
There are three main types of master policies:
1. **Bare Walls Coverage** – Covers only the basic structure, such as exterior walls, roofing, and common areas. It does **not** cover interior elements like flooring, cabinets, or fixtures inside units.
2. Walls-In Coverage – Extends coverage beyond bare walls to include original fixtures inside units but excludes personal belongings and upgrades made by homeowners.
3. **All-Inclusive Coverage** – Covers the building, original fixtures, and sometimes even improvements made by homeowners, though personal belongings remain the owner's responsibility.
What is an HO-6 Policy?
An HO-6 policy, also known as condo insurance, is purchased by individual homeowners to cover what the master policy does not. This policy is crucial in filling gaps and protecting personal property.
Key coverages in an HO-6 policy (coverages will vary for each package):
✅ Personal Property – Covers furniture, electronics, clothing, and other belongings.
✅ Interior Unit Coverage – Depending on the master policy, it may cover flooring, cabinets, appliances, and fixtures.
✅ Loss Assessment Coverage – Helps pay for special assessments charged to homeowners when the HOA’s master policy doesn’t fully cover a loss.
✅ Liability Protection – Covers injuries that occur inside the unit and legal expenses if a claim is filed against the homeowner.
✅ Loss of Use Coverage – Pays for temporary housing if the unit becomes uninhabitable due to a covered event.
✅ Master Policy Deductible Coverage – The HO-6 policy must cover the HOA’s master policy deductible, which must be paid before the master policy begins covering damages.
How HOA Insurance Master and HO-6 Policies Work Together in Utah
In Utah, HOAs typically carry a master policy that covers common areas and shared structures, while homeowners are responsible for insuring their own unit interiors and personal belongings. However, policies must be carefully coordinated to avoid gaps in coverage.
For example:
- If a fire damages a condominium building, the master policy covers exterior repairs, while the HO-6 policy covers interior repairs until the master policy deductible is met and personal property.
- If a resident accidentally causes water damage to a neighboring unit, the owner of the damaged unit and their insurance will be responsible for the damages unless gross negligence of the neighbor can be proven.
- If the HOA issues a special assessment for a major repair, loss assessment coverage in the HO-6 policy may help cover the homeowner’s share if the coverage is provided in the policy.
Additionally, before the master policy begins covering damages, the HOA’s master policy deductible must be met. The homeowner’s HO-6 policy should include coverage for this deductible. If more than one unit is damaged, the deductible will be split among the affected units based on the percentage of damage each unit sustained. Once the deductible is met, the master policy will cover all repairs except for personal property, which remains the homeowner’s responsibility.
Tips for Utah Homeowners in an HOA
📌 **Review the HOA’s Master Policy** – Understanding what’s covered will help you determine how much additional insurance you need.
📌 **Get Adequate HO-6 Coverage** – Work with an insurance agent to ensure your policy properly fills coverage gaps, including the master policy deductible. Insurance agents who are located outside of the state often do not understand how Utah law works. If you are in doubt, contact HOA Love for a local referral.
📌 Ask About Loss Assessment Coverage – HOAs sometimes charge unexpected assessments, and this coverage can protect against high costs.
📌 Stay Informed About HOA Insurance Changes – HOA policies can change over time, so it’s important to stay updated on coverage modifications.
Final Thoughts
HOA insurance policies can be complex, but knowing how your master policy and HO-6 policy work together ensures you’re fully protected. Whether you’re a homeowner, board member, or property manager, understanding insurance responsibilities helps prevent costly surprises.
If your HOA needs guidance on insurance policies, financial planning, or community management, HOA Love is here to help! Let’s make HOA living easier, together.