Master Policy

What is a master policy in an association?

A master policy is the community association’s insurance policy that covers common areas and, in some cases, shared structural elements of buildings, such as exterior walls or roofs. It typically covers 2 areas: 1.)Property Damage (common areas) and 2.) Liability (personal injury). It does not cover individual units or personal property, so homeowners usually need a separate HO-6 policy.

Why is a master policy important?

It is the backbone of the association’s risk management. If disaster strikes, the master policy helps ensure repair costs don’t bankrupt the HOA. It also influences how much homeowners pay for their own coverage and determines who pays when a claim is filed.

How can you use “master policy” in a sentence?

When the clubhouse roof was damaged in a storm, the board filed a claim under the master policy instead of dipping into reserves.