Friday May 22, 2026
Condo insurance today: The decision that can help reshape a building’s future financial risk
The condo insurance market has entered a period of sustained uncertainty, and board members are being asked to make complex decisions with incomplete information. To help cut through the noise, the featured webinar below shares practical insight from FirstService Residential insurance leaders on what is driving today’s coverage challenges and how boards can respond with a more informed strategy.Most condominium insurance problems don’t start with a storm, a fire, or a flooded unit.
They start quietly, at renewal, when a unit owner signs off on a policy they don’t fully understand.
For condo boards, that moment matters more than most realize.
Because when resident insurance falls short, the consequences don’t stop at the unit door. They surface later as special assessments, disputed claims, rising premiums, and strained neighbor relationships.
As Andrew Lester, president of FirstService Financial, put it during the Condo Insurance Today webinar:
"When resident insurance falls short, the losses don’t stay with that unit. They flow back through the claims history of the building and show up at renewal."The uncomfortable truth is that many of the most expensive insurance problems in high-rise buildings are preventable, and they start on the resident side.
Andrew Lester, president of FirstService Financial
Why condo insurance breaks down so often
Across the industry, a consistent pattern appears: most condo owners are not uninsured. They are underinsured.Industry data shows that roughly 65% of condo owners carry the wrong coverage, wrong limits, or gaps they don’t know exist. In a 200‑unit high‑rise, that means about 130 units with policies that will not perform as expected when a loss occurs.
Lester adds,
"Sixty-five percent of condo owners are underinsured. They have policies, but the policies are wrong, and they don’t even know it."This isn’t an affordability issue. A well‑structured HO6 condo policy typically costs $800–$1,000 per year, or about $75 a month. For that amount, owners can cover personal belongings, personal liability, temporary housing, and a meaningful portion of any special assessment.
The real breakdown is informational, not financial.
Lester notes,
"It’s not the cost that’s the problem. It’s an information problem."
Understanding HO6 Insurance: What it covers and what it doesn’t
An HO6 policy is the standard insurance form for condominium and co‑op unit owners. It is designed to work with the association’s master policy, not duplicate it.Here’s how the key coverages function:
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Coverage A: Dwelling
Covers the portion of the unit structure the owner is responsible for. The required limit depends on whether the association’s master policy is written as bare walls or original builder specifications.
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Coverage C: Personal Property
Protects furniture, electronics, clothing, and personal belongings inside the unit. A simple rule of thumb shared in the webinar:"If you could turn your unit upside down and shake it, anything that falls out is typically not covered by the master policy."
Josh Williams, director of insurance solutions -
Coverage D: Loss of Use
Pays for temporary housing and added living costs if a unit becomes uninhabitable after a covered loss. This is often the most appreciated coverage when it’s needed.
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Coverage E: Personal Liability
Protects owners if someone is injured inside their unit or if they accidentally damage another unit. Legal defense costs are included.
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Loss Assessment Coverage
One of the most overlooked coverages. Many HO6 policies default to as little as $1,000, which is rarely sufficient when associations carry percentage‑based deductibles.
A common misunderstanding about what the master policy covers
One of the most persistent misconceptions in high‑rise living is that the association’s master policy covers individual units comprehensively. It does not.Master policies are typically written in one of two ways:
- Bare Walls: Coverage stops at unfinished structural components.
- Original Builder Specifications: Coverage extends to the unit as originally built.
Williams adds,
"The master policy covers the building, not your belongings or how you live in your space."When this division is unclear, claims become more complicated, disputes escalate, and costs rise for everyone.
The seven misunderstandings that drive real losses
Among the most common and costly beliefs:- “I have an HO6 policy, so all water damage is covered.” Only sudden and accidental water damage is typically covered. Gradual leaks often are not.
- “If water comes from another unit, it’s between us.” In reality, both the master policy and individual HO6 policies are usually involved.
- “If the building causes the damage, it covers my hotel stay.” Temporary housing is paid through the owner’s loss of use coverage, not the master policy.
- “If my unit isn’t damaged, I won’t be assessed.” Special assessments are about rebuilding shared structures, not fault.
Water risk: The single largest exposure… and the most preventable
More than 50% of condo claims are water‑related, and over half of those losses are preventable."Every leak that’s caught early is a claim that never hits the policy."Buildings that have invested in leak detection systems, preventive maintenance, and documented risk programs have seen dramatic improvements in claims history and renewal outcomes, including significant premium reductions over time.
John Lee, senior vice president, FirstService Financial
This is where resident insurance and building risk management intersect.
Four responsibilities boards can’t ignore
Effective condo insurance outcomes require coordination among four parties: residents, boards, management, and insurance professionals.Boards play a central role by:
- Communicating coverage expectations clearly at renewal.
- Investing in loss prevention, especially water mitigation.
- Treating preventive maintenance as financial risk management, not just operations.
- Making it easier for residents to access better insurance options, not just a single carrier.
"None of these actions requires new authority. They require intention."
The bottom line for boards and owners
Resident insurance is not a private matter. When HO6 policies fail, the impact reverberates across the entire building through assessments, premiums, and renewal pressure."Engaging with the resident side of insurance is part of a board’s duty, not an extra service."The good news: most of these outcomes are avoidable. The information exists. The tools exist. And when boards put even one of these practices into motion, the financial narrative of the building begins to change.
Andrew Lester, president of FirstService Financial
Watch the full Condo Insurance Today webinar
For deeper context, real examples, and direct insight from industry insurance professionals, watch the full webinar above. The discussion expands on each of these scenarios with practical guidance that boards and residents can apply immediately.
Contact us today to learn more.
This information is provided for general informational purposes only and is not intended to constitute, and should not be relied upon as, legal, regulatory, financial, or operational advice, or as a representation or guarantee of any specific services, capabilities, or outcomes. Property management needs, regulatory requirements, market conditions, and available services vary by jurisdiction, property type, and community. FirstService Residential provides services through locally based affiliates and associates, and services and results may vary by community, region, contractual terms, and applicable law.