Managing a Florida condo building means navigating a split insurance structure where the association covers some things, unit owners cover others, and the gap between the two policies is where the most expensive post-storm disputes arise. Understanding how Florida condominium insurance works -- and where to look for the coverage boundary -- is essential for any property manager operating in the condo market.

Florida Condo Act Insurance Requirements (Chapter 718)

Florida Condominium Act Chapter 718.111(11) requires condominium associations to obtain property insurance for all portions of the condominium property as originally installed. This includes floor, wall, and ceiling coverings, electrical fixtures, appliances, water heaters, water filters, built-in cabinets and countertops, and window treatments including blinds and rods. The association must insure these items at replacement cost.

However, there is a significant exception: associations can amend their declaration to provide "bare walls in" coverage, which shifts insurance responsibility for interior elements to the unit owners. Most Florida condos built or renovated after 2004 use the bare walls standard. The specific standard that applies to any given building is found in the condominium declaration -- property managers must read the declaration before managing a condo building.

Bare Walls vs. All-In: Where the Association Policy Stops

Bare Walls In (Studs Out)

Under bare walls coverage, the association master policy covers the building structure -- concrete, framing, exterior walls, roof, common area systems -- but does not cover any interior elements within the unit boundaries. Floor coverings, interior paint, drywall finishes, fixtures, appliances, and improvements are all the unit owner's responsibility. After hurricane damage that penetrates interior spaces, the association policy pays for structural and common area damage, and the unit owner's HO-6 policy pays for interior damage.

All-In Coverage (Walls In / Single Entity)

Under all-in coverage, the association master policy covers the unit interior to its original installed condition, including fixtures, appliances, and standard finishes. This is the broader standard. Even under all-in coverage, the association policy does not cover unit owner improvements above the original standard, personal property, or loss of use for individual unit owners.

COVERAGE SPLIT OVERVIEW
Building structureAssociation master policy
Common areasAssociation master policy
Unit interior (bare walls standard)Unit owner HO-6
Unit improvements above original standardUnit owner HO-6
Personal propertyUnit owner HO-6
Loss assessment from association deductible gapUnit owner HO-6 (loss assessment endorsement)

What the HO-6 Unit Owner Policy Should Include

A unit owner who understands the bare walls standard will carry an HO-6 condo unit owner policy that covers:

  • Unit interior coverage (Coverage A): Pays for the interior of the unit from the bare walls in, including all finishes, fixtures, and appliances that the association policy does not cover
  • Personal property (Coverage C): Covers the unit owner's personal belongings
  • Personal liability (Coverage E): Covers the unit owner's liability for injuries or damage caused by or within the unit
  • Loss of use (Coverage D): Pays additional living expenses if the unit is uninhabitable
  • Loss assessment coverage: Pays the unit owner's share of a special assessment levied by the association -- this is the critical coverage that most unit owners carry at inadequate limits

The Gap: Association Deductible and Unit Owner Exposure

After a major hurricane, the association master policy hurricane deductible can be a substantial percentage of the building Coverage A. On a 10-unit building insured at $2,000,000 with a 5% hurricane deductible, the deductible is $100,000. If association reserves cover $40,000, the remaining $60,000 is assessed to unit owners -- $6,000 per unit. A unit owner without loss assessment coverage on their HO-6 pays that $6,000 out of pocket. A unit owner with $10,000 in loss assessment coverage pays nothing.

THE DEFAULT $1,000 LOSS ASSESSMENT LIMIT IS ALMOST NEVER ADEQUATE

Standard HO-6 policies include $1,000 in loss assessment coverage by default. After a major hurricane event, assessments of $5,000-$25,000 per unit are common in Florida condos with large deductibles or inadequate association reserves. Property managers should advise unit owners to increase their loss assessment coverage to at least $5,000-$25,000 at HO-6 renewal.

What Property Managers Should Verify in the Master Policy

Before accepting a condo management assignment -- and annually at each master policy renewal -- property managers should review and document:

  • The bare walls vs. all-in coverage standard (found in the declaration and confirmed in the master policy)
  • Coverage A limit and whether it is at replacement cost (Chapter 718 requires replacement cost coverage)
  • Hurricane or named storm deductible amount and percentage
  • Flood coverage status -- NFIP or private flood, or gap that exists
  • General liability limits for common areas (minimum $1M per occurrence)
  • Carrier financial strength rating (Demotech or AM Best)
  • Date of last insurance appraisal of building replacement cost
  • Association reserve fund balance and adequacy relative to the deductible
ANNUAL APPRAISAL IS REQUIRED

Florida Statute 718.111(11) requires condo associations to obtain an independent insurance appraisal at least every 36 months to verify that the Coverage A insured value reflects actual replacement cost. Properties in Florida have seen significant construction cost increases -- a building insured at 2020 values may be substantially underinsured by 2026 standards. Underinsurance at the association level creates a coverage gap that flows down to unit owners through higher assessments after a loss.

Track master policy details, deductibles, and reserve levels across your condo portfolio in LossHQ

Know exactly where the coverage gap is before a loss -- not during the claims process.

Start Free -- No Card Required ->

The Bottom Line

The association master policy and the unit owner HO-6 together create the insurance picture for a Florida condo -- but only if both policies are structured correctly and the coverage boundary between them is understood. Property managers who know the bare walls vs. all-in standard for each building they manage, who confirm loss assessment coverage is adequate for unit owners, and who review the master policy at renewal annually are positioned to manage post-storm claims efficiently. For related guidance, see Florida landlord insurance requirements, property manager liability insurance in Florida, and Florida hurricane insurance deductibles.