• Unlike a homeowner, the owner of a condominium unit does not own the building in which their unit is located, nor the land on which the building sits.
• A single-family home is covered by a single homeowners policy (most often an HO-3 policy). In contrast, a condominium is usually covered by two distinct policies - the master policy and the unit owner’s policy (an HO-6 policy).
• An HO-3 policy held by the owner of a single-family home covers the entire structure of the dwelling (exterior and interior), whereas an HO-6 policy held by the owner of a condominium unit may only cover the interior of the unit and its contents. A unit owner should confer with the condominium association and review the condominium bylaws to confirm which elements are covered under the master policy, and which elements they should ensure are covered under their HO-6 policy.
• Like homeowners insurance, a condominium unit owner is not required under Maryland law to carry an H0-6 policy. However, in many cases a unit owner is required to have an HO-6 policy by their mortgage lender or pursuant to their condominium association's governing documents.

​What is the difference between the “master policy” and “unit owner’s policy”?

• The master policy:
• Is a type of commercial insurance policy, because it is held by a business entity (generally the condominium association) to protect it against losses and liabilities;
• Generally provides property damage coverage for common areas (such as sidewalks, pools, and residential fitness centers) and the exterior/structure of buildings;
• Provides liability coverage for accidents or injuries that occur in the common areas, protecting the condominium association from lawsuits;
• Provides coverage for damage resulting from covered perils (such as fire and lightning) to the basic structure of the units, including the walls, floors, and fixtures that were included in the original construction of the unit;
• Contains deductibles that are chosen by the condominium association (there may be separate deductibles for different causes of loss); and
• Is paid for by the condominium association, typically with fees collected through an assessment of the individual unit owners.
  
• The unit owner’s policy (HO-6 policy):
• Is a specific type of homeowners insurance that is directly purchased and held by the condominium unit owner;
• Contains deductibles that are chosen by the unit owner (there may be separate deductibles for different causes of loss);
• Provides coverage for property damage to the interior of the condominium unit, including any improvements within the unit;
• Provides personal property coverage for the unit owner’s personal belongings within the unit, such as furniture, electronics, and clothing;
• Provides liability coverage for accidents or injuries that occur within the unit, protecting the unit owner from lawsuits;
• May provide loss of use coverage (optional add-on), which helps the unit owner pay for temporary living expenses in the event that the unit becomes uninhabitable due to a covered peril; and
• May provide loss assessment coverage (optional add-on), which will pay for the unit owner’s share of an assessment issued by the condominium association to cover any portion of a loss sustained by the association that exceeds the limits of the association's master policy.

• Laws that specify requirements for master policies are primarily found within the Maryland Condominium Act, which is codified at Title 11 of the Real Property Article.
• Section 11–114(c)(1) provides that each unit owner is an insured under the condominium association’s master policy and, therefore, may make a claim for a loss that is covered under the master policy. MIA Bulletin 09-22 clarifies that, while a management company may act as a conduit for claims made under the master policy, it cannot refuse to present a claim for a unit owner under the master policy (view bulleti​n here). 
• Section 11–114(g)(ii)(2) provides that, if the cause of any damage to or destruction of any portion of the condominium originates from the common elements or an event outside of the condominium units and common elements, the master policy deductible is a common expense.
• ​In this case, the association will recoup the deductible from all unit owners via an assessment.
• Section11–114(g)(iii) provides that, if the cause of any damage to or destruction of any portion of the condominium originates from a particular unit, the owner of that unit is responsible for the master policy deductible, up to $10,000.
• If the unit owner has an HO-6 policy with loss assessment coverage, their policy may cover the portion of the master policy deductible that they are responsible for. Otherwise, the unit owner will be personally liable.
• Laws that specify requirements for homeowners insurance, including condominium insurance (HO-6), are primarily codified at Title 19, Subtitle 2 of the Insurance Article.
• Laws codified at Title 27 of the Insurance Article identify unfair trade practices that personal property insurers (including homeowners and unit owner’s insurers) are prohibited from engaging in, and set forth notice requirements pertaining to cancellations, nonrenewals, and premium rates at renewal.
• Section 27–501(u) prohibits an insurer from refusing to issue a policy covering a residential condominium unit based solely on the applicant’s prior lapse in coverage due to an insurer's withdrawal from the market, if: the lapse in coverage was no longer than 90 days, the applicant provides an affidavit that the applicant has not incurred any losses during the lapse in coverage, and the applicant provides any other documentation required by the insurer.

• Visit our ​webpage on condominium insurance.​
  

• Watch a recorded webinar that discusses condominium ins​urance in more detail.