Your association’s master property policy is the single most expensive line item in your insurance program — and usually the single most important. It covers the physical building structures, common area improvements, and shared building systems (elevators, HVAC, plumbing, electrical) against covered perils like fire, wind, water damage, and other named risks.
For condominium associations in Florida, the master policy is required by Section 718.111(11) of the Florida Condominium Act. The statute specifies minimum coverage requirements, including replacement cost coverage for all insurable common property. Most governing documents (your Declaration of Condominium) add requirements on top of the statutory minimums.
What the master policy typically covers
The building structure itself — walls, roofs, floors, foundations. Common area improvements like lobbies, hallways, pool decks, and clubhouses. Building systems and permanently installed fixtures. Many associations also carry coverage for unit interiors depending on whether the association’s coverage is “all-in” (covering everything from the studs in, including unit finishes) or “bare walls” (covering only the structural elements, with unit owners responsible for their own interiors).
The coverage form matters enormously. An HO-6 wrapper policy that unit owners carry is supposed to fill the gap between what the master policy covers and what the unit owner needs — but if the board doesn’t clearly communicate what the master policy includes and excludes, unit owners are often underinsured without knowing it.
What Florida law requires
Under Section 718.111(11), condominium associations must maintain property insurance on all common property and units at replacement cost. The association is the named insured, and the policy must cover “all portions of the condominium property as originally installed or replacement of like kind and quality.” The policy must have a deductible not exceeding the greater of $10,000 or 5% of the policy value covering the buildings.
Common gaps boards don’t know about
Replacement cost vs. actual cash value
A policy written on an ACV basis depreciates the building’s value — meaning after a major loss, the payout won’t cover the cost to rebuild. Florida law requires replacement cost for condominiums, but the policy’s stated replacement cost value must also be accurate. If your building was last appraised five years ago and construction costs have increased 40%, your coverage may technically meet the statutory requirement while being dramatically inadequate.
The appraisal gap
Insurance appraisals determine the replacement cost value that your policy is based on. If your appraisal is outdated, your coverage limit is wrong. In a total loss scenario, the carrier pays up to the policy limit — not the actual cost to rebuild. An association with a $20M building insured for $15M based on an old appraisal has a $5M problem that becomes a special assessment.
Named storm deductibles
In coastal Florida, named storm (hurricane) deductibles are typically 2–5% of the total insured value — not 2–5% of the damage. On a building insured for $30M, a 3% named storm deductible is $900,000 that the association pays out of pocket before insurance kicks in. Boards often don’t realize the magnitude of this number until after a hurricane.
Ordinance or law coverage
If your building is damaged and current building codes require upgrades during reconstruction (which they almost certainly will), standard property policies may not cover the additional cost to meet current code. Ordinance or law coverage fills this gap, but it’s not always included by default.
What boards should be asking at renewal
When was our last insurance appraisal, and does our coverage limit match current replacement cost? What is our named storm deductible in dollar terms? Do we have ordinance or law coverage, and what’s the limit? Is our policy “all-in” or “bare walls” and have we communicated that clearly to unit owners? What’s our wind vs. non-wind deductible structure?
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