How can the master deductible effect the unit owner?

When losses occur the condo association may try to pass some or all of that deductible back to the owner whose unit caused the loss.

Here is how that usually works:

If a water leak, fire, or other covered loss starts in a unit and the condo association files a claim under the master policy, the association's insurer applies the master policy deductible first. If that deductible is large, the association may assess that amount to the responsible unit owner, depending on the condo documents and state rules.

Common examples:

• A unit owner's washing machine hose bursts and damages common areas and units below.
• The association's master policy pays for the building damage.
• The master policy has a $10,000, $25,000, or even $50,000+ deductible.
• The association then seeks reimbursement from that unit owner for some or all of the deductible.

Why this matters:

• Many unit owners assume the HOA deductible is only the association's problem.
• In reality, the owner may be responsible if the damage originated in their unit or resulted from their negligence.
• Some bylaws allow the association to charge back the deductible even without negligence, simply because the loss originated from that unit.

How the unit owner can protect themselves:

• Carry an HO-6 condo policy
• Make sure it has enough building coverage and loss assessment coverage
• Review whether the policy can respond to master policy deductible assessments
• Understand the condo association's bylaws and insurance requirements

The master deductible can become the unit owner's out-of-pocket cost if a claim starts in their unit and the association charges that deductible back to them.