When you manage a condo unit on behalf of an owner — or own a condo unit yourself and rent it out — you are operating inside a two-policy system. The condo association's master policy covers some of the property. Your HO-6 unit owner policy is supposed to cover the rest. The problem is that most property managers and landlords cannot accurately describe where the master policy ends and their HO-6 begins until they file a claim and discover the gap firsthand.
In Florida, this gap has financial consequences that go well beyond minor coverage disputes. Florida's hurricane exposure means that master policy deductibles are large percentage-based figures — and when a major storm triggers a special assessment to fund that deductible, unit owners receive bills that can run $10,000 to $50,000 or more. Whether your HO-6 covers that assessment depends entirely on coverage choices most landlords have never reviewed.
This guide covers the three master policy types, what each covers and excludes, how to determine which type your association carries, the loss assessment trap that catches unit owners after every major storm, and an audit checklist property managers should run for every condo unit in their portfolio.
The Three Master Policy Coverage Types
Florida Statute 718.111(11)(f) requires condominium associations to insure "all original improvements and replacements thereto." In practice, this requirement is interpreted differently by different associations and insurance carriers, producing three coverage structures that vary dramatically in what they cover at the unit level.
1. Bare Walls Coverage
Bare walls (also called "studs out") is the narrowest coverage type. The master policy insures the building structure to the unfinished interior surfaces — the concrete, studs, and raw drywall — but nothing inside the unit. Flooring, paint, cabinetry, fixtures, built-in appliances, and unit owner improvements are all excluded. After a storm, the master policy would pay to restore the unit to a bare concrete box. Everything inside is your problem.
Important Florida note: Bare walls-only coverage is technically inconsistent with Florida Statute 718.111(11)(f), which requires coverage of "all original improvements and replacements." Some Florida associations and carriers interpret this as requiring at minimum a single entity or all-in structure. However, the statute has not been uniformly enforced on this point, and bare walls master policies do exist in Florida. Do not assume your association's policy complies with statute without reviewing the declarations page.
2. Single Entity Coverage
Single entity (also called "original fixtures") covers the building structure plus all fixtures and improvements in the unit as they existed when the building was originally constructed or as replaced by the association — but not unit owner upgrades. If the original unit had builder-grade tile and a later owner upgraded to high-end stone tile, the master policy covers the builder-grade value. The owner-installed upgrade is excluded. This is the most common approach among Florida condo associations.
3. All-In Coverage
All-in (also called all-inclusive or all-inclusive with improvements) is the broadest coverage. The master policy covers the building structure plus all fixtures, flooring, appliances, and improvements — whether installed originally or by a subsequent unit owner. If a hurricane destroys the unit's upgraded kitchen, the master policy pays for comparable replacement. This is the most protective for unit owners and landlords, but it also comes with higher premiums that the association funds through monthly dues.
What Your HO-6 Must Cover (and What It Often Doesn't)
An HO-6 policy for a landlord renting a condo unit is designed to sit on top of the master policy and fill the gaps. But the HO-6 must be structured correctly for the master policy type the association actually carries. Most landlords buy an HO-6 without ever checking what the master policy covers first.
Interior Improvements and Betterments (Coverage A)
This is Coverage A on the HO-6 form — sometimes called "dwelling coverage" even though it is technically a condo unit. If the master policy is bare walls, Coverage A on your HO-6 needs to cover the full replacement cost of everything inside: flooring, paint, fixtures, cabinetry, built-in appliances, interior drywall finishing, and any improvements the owner installed. If the master policy is all-in, your Coverage A need only cover upgrades above what the master policy would pay — but you need to know the master policy's valuation approach to calculate that.
The common mistake: Property managers and owners buy an HO-6 with a $30,000 or $50,000 Coverage A limit without modeling what it would actually cost to rebuild the interior. A 1,200-square-foot condo with updated finishes can easily cost $80,000 to $120,000 to reconstruct the interior after a major storm. An underinsured Coverage A leaves the difference entirely out of pocket.
Personal Property (Coverage C)
As a landlord, your personal property inside the unit is typically limited to appliances, window treatments, and any furniture or equipment you own. Tenants' belongings are not covered by your policy — they are the tenant's responsibility, which is why requiring renters insurance as a lease condition is essential. Your Coverage C only needs to reflect what you as the owner have in the unit.
Liability (Coverage E)
Liability coverage protects you if a tenant or guest is injured in the unit and you are found liable. Standard HO-6 policies carry $100,000 to $300,000 in liability coverage — typically not enough for a serious injury claim in Florida. If you own multiple condo units, a personal umbrella policy that layers over your HO-6 liability limits is the appropriate solution.
Loss of Rental Income
HO-6 policies for landlords include fair rental value coverage, which replaces rent when the unit is uninhabitable due to a covered loss. Verify that your HO-6 includes this coverage (some HO-6 forms are designed for owner-occupants and omit it) and that the limit is at least 12 months of actual rent. After a major hurricane, repairs routinely take 12 to 18 months.
The default loss assessment limit on most HO-6 policies is $1,000. After a major Florida hurricane, condo special assessments for storm damage — including deductible funding — commonly run $15,000 to $75,000 per unit. A $1,000 loss assessment limit covers almost nothing. Request a loss assessment endorsement with a limit of at least $25,000 to $50,000, priced at what your association's master policy deductible implies for your ownership percentage. This is the single most commonly underinsured item in Florida condo ownership.
The Hurricane Deductible Problem for Unit Owners
Florida condo associations carry hurricane deductibles expressed as a percentage of the total insured building value — typically 2% to 5%. On a large building this creates enormous deductible exposure that the association must fund before the master policy pays anything.
Consider a 100-unit condo building in Pinellas County with a $15 million insured value and a 3% hurricane deductible. The deductible is $450,000. If the building's reserves are insufficient to cover that $450,000, the board levies a special assessment. Every unit owner's share is proportionate to their ownership percentage — in an equal-ownership building, that is $4,500 per unit just for the deductible, before any uninsured or underinsured repair costs are added.
After Hurricane Ian (2022), some Fort Myers Beach condo associations levied assessments of $30,000 to $80,000 per unit. Owners who had loss assessment coverage with adequate limits were reimbursed by their HO-6 policy. Owners who had the standard $1,000 default limit wrote personal checks for the rest.
To calculate the right loss assessment limit for your unit:
- Get the master policy hurricane deductible percentage (e.g., 3%)
- Get the total insured building value from the association's declarations page
- Multiply deductible % × total insured value = total building deductible
- Get your unit's ownership percentage from the association documents
- Multiply total building deductible × your ownership % = your maximum deductible assessment exposure
- Add a contingency for uninsured or underinsured repair costs
How to Get the Master Policy Information You Need
Property managers who manage condo units for owners should request master policy information annually. Under Florida Statute 718.111(12), condo associations must make records available within 10 business days of a written request. Here is what to request:
- Master policy declarations page (coverage type, limits, deductibles)
- Hurricane deductible percentage and calculation basis
- Coverage type confirmation (bare walls, single entity, or all-in)
- Whether loss assessment is triggered under the master policy and how it is allocated
- Current reserve fund balance and whether it covers the hurricane deductible
Many associations provide an annual "Certificate of Insurance" to unit owners but do not include the full declarations page. Push for the full declarations — the certificate alone does not contain the coverage type or the deductible detail you need.
The Improvements and Betterments Problem
When a previous owner installed upgrades — hardwood floors over builder-grade tile, custom cabinetry, upgraded countertops — those improvements are "betterments" that may or may not be covered by the master policy depending on the coverage type. Under a bare walls or single entity policy, betterments installed by a prior owner are excluded entirely. This creates a scenario where the master policy pays for the original builder finishes, the HO-6 Coverage A fills the gap to today's standard, but the gap between the builder-grade restoration and the upgraded finishes that were actually there falls to the unit owner — unless specifically addressed in Coverage A.
When you take on management of a condo unit, document the current finish quality in writing: type and grade of flooring, cabinet quality, appliance models and ages, countertop material. This documentation establishes the baseline for an accurate Coverage A limit and creates an undeniable record if a coverage dispute arises post-claim.
Coverage Table: What the Master Policy Covers vs. Your HO-6
| ITEM | BARE WALLS MASTER | ALL-IN MASTER | YOUR HO-6 |
|---|---|---|---|
| Exterior walls and structure | COVERED | COVERED | NOT NEEDED |
| Common areas (lobby, pool, hallways) | COVERED | COVERED | N/A |
| Interior drywall and subfloor | EXCLUDED | COVERED | FILL GAP |
| Original builder flooring | EXCLUDED | COVERED | FILL GAP |
| Owner-installed upgrades | EXCLUDED | SOMETIMES | COVER HERE |
| Built-in appliances (original) | EXCLUDED | COVERED | FILL GAP |
| Loss assessment from storm | TRIGGERS ASSESSMENT | TRIGGERS ASSESSMENT | ENDORSEMENT REQ'D |
| Tenant personal property | EXCLUDED | EXCLUDED | NOT YOUR POLICY |
What This Means After a Major Florida Hurricane
When a major hurricane damages your condo building, the claims process unfolds in two separate tracks simultaneously. The association files against the master policy for building damage. You file against your HO-6 for interior damage and any special assessment that follows. These two claims are handled by different adjusters, run on different timelines, and produce settlement offers that must be reconciled against each other.
The coordination challenge: the master policy adjuster determines what the association gets paid. The association then determines what repairs are completed at the building level and when. Your HO-6 adjuster works from a scope of what is not covered by the master policy — but they need the master policy settlement information to finalize that scope. In practice, unit owners often wait months for the master policy to settle before the HO-6 claim can be fully resolved.
Property managers who document the unit interior thoroughly before storm season, obtain a copy of the master policy declarations annually, and carry HO-6 policies with realistic Coverage A limits and adequate loss assessment endorsements routinely get better outcomes on both tracks of this process. Those who rely on the master policy to "handle it" are often writing large personal checks after the adjusters finish.
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