What Is a Condo Master Policy?

Short answer

A condo master policy is the property insurance the association buys for the building and common elements, paid through your monthly dues; it does not cover your furniture or the finishes inside your unit, which is why you also need an HO-6 policy. For a conventional loan, Fannie Mae requires the master policy to cover at least 100% of estimated replacement cost with a deductible no higher than 5% of the policy amount (as of November 2026).

Definition

The association's property insurance on the condominium as originally built, including common elements. Under Florida law it excludes items inside a unit that serve only that unit, such as floor, wall and ceiling coverings, appliances, water heaters, cabinets and countertops.

Worked example

Example only: a 200-unit building is insured for $40,000,000 with a 5% named-storm deductible, which is $2,000,000, the most Fannie Mae allows. A hurricane causes $3,000,000 of damage. The policy pays $1,000,000 and the association must cover the $2,000,000 deductible. Under F.S. 718.111(11)(j) deductibles are generally a common expense, so if split evenly that is $10,000 per unit as a special assessment. Florida requires HO-6 policies to include at least $2,000 of loss assessment coverage, so an owner who never raised that limit could pay most of the $10,000 out of pocket.

Master policy vs HO-6: who covers what

• Master policy (association): the structure, roof, exterior walls, common areas and the unit as originally installed, under F.S. 718.111(11).
• HO-6 (you): your personal property, plus floor, wall and ceiling coverings, electrical fixtures, appliances, water heaters, built-in cabinets, countertops and window treatments inside your unit. Florida assigns these to the owner.
• Loss assessment coverage: F.S. 627.714 requires at least $2,000 on your HO-6, with a deductible of no more than $250. Ask your agent about a higher limit.

Fannie Mae requires an HO-6 whenever the master policy does not cover the unit's interior or uses a per-unit deductible.

What lenders check (Fannie Mae B7-3-03)

As of November 2026, the master policy must equal at least 100% of estimated replacement cost and include windstorm, including named storms. The deductible can be up to 5% of the policy amount per occurrence, or up to $50,000 per unit. Each separate deductible, such as a hurricane deductible, must meet that limit on its own. If the master policy excludes a required peril, the association needs a separate policy for it. Buying in a building that falls short? Ask us about non-warrantable condo loans and condo loans in Florida. Rates vary daily; call 305-425-1990 for today's pricing.

In South Florida

Florida law (F.S. 718.111(11)) requires the association to carry adequate property insurance, and replacement cost must be determined at least once every 3 years. South Florida coastal buildings face high windstorm premiums and large hurricane deductibles, which flow into your dues and possible assessments. Lenders review the master policy during the condo questionnaire process, and a building with too little coverage or too high a deductible can become a non-warrantable condo.