HOA MASTER
PROPERTY INSURANCE
IF THE TOTAL INSURED VALUE IS WRONG, EVERY CLAIM IS WRONG.
Lenders and warrantability requirements demand replacement cost valuation — what it costs to rebuild at today's prices, not what the building sold for.
Insuring to 75% of replacement cost when the policy requires 90% means the carrier reduces every claim — even small ones — by the shortfall percentage.
A valuation from three years ago may understate current replacement cost by 20% or more. Annual updates are essential.
The CC&Rs define where the master policy starts and stops. The wrong scope creates uninsured gaps that surface during claims.
The master property policy is the foundation of every community association insurance program. It covers the physical structures and common elements the association owns — buildings, roofs, parking structures, pools, clubhouses, fencing, and the infrastructure that connects them. The total insured value on this policy determines how much the carrier will pay when something is damaged or destroyed. If that number is wrong — and it is wrong more often than most boards realize — every claim is affected.
Kelly Insurance Group starts every association program with the master property valuation. We work with boards to establish accurate replacement cost values, structure the policy as blanket or scheduled based on the community's needs, and secure agreed amount endorsements that eliminate coinsurance penalties. For aging buildings and hard-to-place associations, we access specialty markets that write property risks the standard market declines.
TAP A VALUATION METHOD TO SEE HOW IT AFFECTS YOUR CLAIM.
The valuation method determines how much the carrier pays when your building is damaged. Not all methods are equal.
UNDERVALUE YOUR PROPERTY AND THE CARRIER REDUCES EVERY CLAIM.
Coinsurance is a policy condition requiring the association to insure to at least 80 or 90 percent of replacement cost. If the actual replacement cost is ten million dollars and the policy only carries eight million on a 90 percent coinsurance basis, the association is underinsured. When a loss occurs — even a small one — the carrier applies the coinsurance formula and reduces the payment proportionally. A hundred-thousand-dollar kitchen fire claim might pay only eighty-nine thousand after the penalty. The agreed amount endorsement eliminates this risk by locking in the valuation at inception and waiving the coinsurance clause entirely.
MORE ASSOCIATION COVERAGE
MASTER PROPERTY COVERAGE — ANSWERED.
WHAT DOES AN HOA MASTER PROPERTY POLICY ACTUALLY COVER?
The physical structures and common elements the association owns — buildings, roofs, exterior walls, lobbies, elevators, parking structures, pools, clubhouses, fencing, and landscaping infrastructure. The scope depends on the association type and governing documents.
WHAT IS THE DIFFERENCE BETWEEN REPLACEMENT COST AND ACTUAL CASH VALUE?
Replacement cost pays to rebuild at current prices with no depreciation deduction. Actual cash value deducts depreciation, meaning older structures receive less. Lenders and warrantability standards require replacement cost.
WHAT IS COINSURANCE AND WHY DOES IT MATTER?
Coinsurance requires insuring to at least 80-90% of replacement cost. Falling below the threshold means the carrier reduces every claim proportionally — even small ones. This is the penalty most boards don't understand until a claim is reduced.
SHOULD THE ASSOCIATION USE BLANKET OR SCHEDULED?
Blanket covers all buildings under one total insured value — simpler and more flexible for multi-building campuses. Scheduled lists each building separately. Blanket is generally preferred unless the portfolio is very large or diverse.
HOW OFTEN SHOULD THE VALUATION BE UPDATED?
Annually at minimum, with a professional appraisal every three to five years. Construction costs change significantly year to year, and outdated valuations trigger coinsurance penalties.
WHAT IS AN AGREED AMOUNT ENDORSEMENT?
It suspends the coinsurance clause. The carrier and association agree on the value at inception, and the carrier waives the right to impose a coinsurance penalty. Requires a current appraisal but eliminates the biggest risk in property coverage.
GET YOUR PROPERTY VALUED AND COVERED RIGHT.
Kelly Insurance Group starts every program with the master property valuation — because if that number is wrong, everything else is wrong too. Since 1881.
The availability of coverage and eligibility for coverage can depend on numerous factors. We cannot guarantee that all customers, individuals, and businesses looking for coverage will be successful in these efforts when contacting our team. All policy coverages and terms need to be fully reviewed by the respective consumer to ensure the coverage asked for is what is specifically being quoted or provided by any insurance policy. Insurance Policies, Coverage Changes, and their terms and conditions are not bound or altered until written confirmation is provided by one of our licensed team members or underwriters. This page does not offer legal advice, legal opinions, or policy interpretations. Rather, this page is meant as a resource to help provide customers and insurance consumers with additional considerations that may help in their insurance buying or pursuit of insurance information. Kelly Insurance Group does not employ or direct attorneys.
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Disclaimer: Coverage availability and eligibility may depend on underwriting review, carrier guidelines, policy terms, state requirements, business operations, risk characteristics, and other information provided during the application or quoting process. Kelly Insurance Group cannot guarantee that every individual, customer, organization, or business seeking coverage will qualify for, receive, or successfully place insurance coverage. All policy coverages, exclusions, conditions, limits, endorsements, and terms should be carefully reviewed by the consumer, insured, or applicant to confirm that the coverage requested is the coverage being quoted, offered, or provided. Insurance coverage, policy changes, endorsements, cancellations, and other policy terms are not bound, changed, confirmed, or altered unless and until written confirmation is provided by a licensed Kelly Insurance Group team member, the applicable insurance carrier, or an authorized underwriter. This page is provided for general informational purposes only and does not provide legal advice, legal opinions, insurance coverage opinions, or policy interpretations.