Understanding Condo Association Insurance: What You Need to Know

February 18, 2025

Managing a condo community means juggling a lot of moving parts — maintaining shared spaces, handling resident concerns, and making financial decisions that impact everyone. However, one of the most critical responsibilities of a condo association is ensuring the entire property is properly insured. A winter storm could tear through the roof, a visitor could slip on an icy walkway, or an aging boiler could break down, leaving residents in the cold — literally and financially. Without the right condo insurance in Massachusetts, your association could be left footing the bill for costly repairs or legal claims.

A condominium association master policy acts as a safety net, covering shared spaces, structural elements, and liability risks that individual unit owners’ policies don’t address. Understanding what’s included and where there may be gaps is key to keeping your condo community protected.

Property Coverage Basics

A condo association’s master policy typically covers the building’s exterior and common areas, ensuring that when damage strikes, the association isn’t forced to drain reserves or levy special assessments on unit owners. 

Lobbies, elevators, stairwells, and fitness centers typically fall under the umbrella of this policy. Certain structural elements like the roof, foundation, and exterior walls may also be covered, depending on the policy. High-end decor, such as chandeliers or artwork in shared spaces, may require additional coverage.

Beyond protecting against fires, storms, and vandalism, a well-rounded master policy can also include coverage for issues like sewer and drain backups, which can lead to extensive water damage. Equipment breakdown insurance is another important safeguard, covering essential building systems such as heating, cooling, and electrical components. Many associations also opt for employee crime coverage to protect their financial assets from fraud or theft.

Liability Insurance Essentials

A visitor walking into a condo building doesn’t see the invisible risks lurking in shared hallways and parking areas, but association board members should. Without proper liability insurance, a slip on an icy walkway or a fall on a poorly maintained staircase could result in costly legal battles. A master policy helps cover medical expenses, legal fees, and potential settlements, shielding the association from financial strain.

Liability coverage isn’t just about personal injuries — it can also come into play when association property damages a unit. If a shared plumbing system leaks into an owner’s condo or a tree from the common grounds crashes onto a resident’s car, liability insurance may step in. 

Legal disputes, whether with vendors, contractors, or disgruntled residents, are another reality condo associations face. Having the right protection ensures the board has a financial safety net when challenges arise.

Flood and Specialty Coverages

Standard policies don’t always account for every potential disaster. For condo buildings located in flood-prone areas, a separate flood insurance policy may be necessary to avoid significant out-of-pocket expenses. 

Associations that collect rental income from commercial units or short-term rental spaces should consider coverage for lost revenue in case of a major disaster. For communities that use golf carts, maintenance vehicles, or other mobile equipment, specialty insurance is essential to cover these assets.

A thorough review of the association’s bylaws can reveal additional coverage gaps. Some policies may leave certain repairs to be covered by individual unit owners’ policies, while others may place financial responsibility on the association. Understanding these details is crucial to ensuring there are no unwelcome surprises when a claim needs to be filed.

Finding the Right Coverage Without Overpaying

Striking the right balance between coverage and affordability is one of the biggest challenges for condo associations. The deductible amount is a key factor — choosing a higher deductible can lower monthly premiums, but the association needs to ensure it has enough reserves to cover the out-of-pocket cost if a claim is made. Similarly, coinsurance percentages impact how much the association is required to contribute toward repairs, making it essential to evaluate what level of risk is financially sustainable.

Customizing a master policy to fit an association’s unique needs can lead to cost savings without sacrificing protection. Working with an independent agency like Berlin Insurance Group provides the advantage of comparing policies from multiple top-rated insurers, ensuring the best coverage at competitive rates. An experienced insurance partner can also help identify overlooked risks and recommend cost-effective ways to enhance protection.

A Master Policy for a Secure Future

For condo associations, having the right master policy is both a legal requirement and a safeguard against financial instability. When unexpected damage, lawsuits, or liability claims arise, a well-structured policy ensures the association isn’t left scrambling for solutions.

Berlin Insurance Group specializes in Massachusetts condo insurance, offering tailored solutions that align with each association’s unique needs. Whether you’re reviewing an existing policy or have questions about enhanced coverage options, our team is here to help. Connect with Berlin Insurance Group today to protect your condo community with confidence.

About Berlin Insurance Group

At Berlin Insurance Group, we collaborate with top insurance partners nationwide to ensure you receive exceptional coverage from highly rated companies. As an independent agency, we have the flexibility to shop among dozens of carriers, each specializing in different types of risks, to find the best deals tailored to your specific needs. Whether it’s for your home, auto, or business, contact us today for a customized quote.