If you own a condo, 2026 is shaping up to be a pivotal year for your insurance coverage. Major insurers are pulling out of key markets, master policy deductibles are climbing, and understanding the difference between your personal HO-6 policy and your association's coverage has never been more important. Here's what's changing and what you need to know to protect your investment.
The 2026 Condo Insurance Landscape: What's Changing
In December 2024, Liberty Mutual and its subsidiary Safeco announced they're exiting California's condo and rental insurance markets entirely by 2026. This affects nearly 67,500 condo owners who will need to find new coverage before their policies are non-renewed. The company cited financial underperformance in these lines, a decision that reflects broader market instability driven by increasing wildfire risks and catastrophic losses.
But California isn't the only state seeing turbulence. Across the country, condo owners are dealing with rising premiums, higher deductibles on master policies, and more stringent coverage requirements. In South Florida, average condo insurance premiums jumped over 50% following recent hurricanes and the 2021 Surfside collapse—far outpacing general inflation. Even in traditionally stable markets, insurers are reassessing risk and adjusting pricing accordingly.
Understanding HO-6 Coverage: What Your Policy Actually Protects
Your HO-6 condo insurance policy is designed to cover what your association's master policy doesn't. Think of it as "walls-in" coverage—it protects everything inside the unfinished walls of your unit. This includes your personal belongings, interior improvements like upgraded flooring or kitchen cabinets, and liability if someone gets injured inside your unit.
Most HO-6 policies include six core coverages: dwelling/interior structure coverage, personal property coverage, liability protection, loss of use (covering temporary housing if your unit becomes uninhabitable), medical payments to others, and loss assessment coverage. That last one—loss assessment coverage—is becoming critically important as master policy deductibles rise.
Nationally, the average cost for condo insurance in 2025 ranges from $400 to $700 per year, or roughly $40 to $60 per month. However, if you live in a high-risk state like Florida or Louisiana, you could pay $1,000 or more annually. These rates are based on typical coverage levels: $50,000 in personal property coverage, $300,000 in liability coverage, and a $1,000 deductible.
Master Policy vs. Unit Owner Coverage: Where the Gaps Hide
Here's where things get tricky. Your condo association carries a master insurance policy that covers the building structure and common areas like hallways, elevators, pools, and roofs. But the extent of that coverage depends on what type of master policy your association has chosen. There are three main types:
Bare Walls-In policies stop coverage at the drywall, meaning you're responsible for everything inside—flooring, cabinets, fixtures, even interior paint. Single Entity policies cover the structure and original fixtures, but not upgrades or improvements you've made. All-In policies are the most comprehensive, covering the building structure plus most built-in features, leaving your HO-6 to cover only personal belongings and liability.
The problem? Many condo owners don't know which type of master policy their association carries, and that creates dangerous coverage gaps. If you've remodeled your kitchen with granite countertops and custom cabinets, but your master policy is bare walls-in, you could be drastically underinsured. Worse, if the master policy has a $25,000 deductible and your HO-6 only includes the standard $1,000 in loss assessment coverage, you could be on the hook for up to $24,000 out of pocket after a major claim.
Why Loss Assessment Coverage Matters More Than Ever
Loss assessment coverage protects you when your condo association issues a special assessment to cover expenses the master policy can't handle—either because the damage exceeds policy limits or because the association's deductible is higher than the repair cost. Common scenarios include major roof repairs after storm damage, elevator replacements, pool accidents resulting in liability claims, or foundation issues affecting the entire building.
Most standard HO-6 policies include only $1,000 to $5,000 in loss assessment coverage—nowhere near enough if your association faces a catastrophic loss. Master policy deductibles now routinely reach $25,000 or higher, especially for hurricane or wind damage in coastal areas. Some Florida associations report deductibles exceeding $100,000 for named storm events.
The good news is that you can increase your loss assessment coverage significantly for a relatively small additional premium. Most insurers offer coverage ranging from $10,000 to $100,000. Given the rising cost of repairs and increasing catastrophic weather events, bumping your loss assessment coverage to at least $25,000 to $50,000 is a smart move for most condo owners.
Common Claim Issues and How to Avoid Them
Water damage from neighboring units tops the list of common condo insurance claims. A neighbor's overflowing bathtub or burst pipe can flood your unit, and determining which policy applies—your HO-6 or the association's master policy—often becomes contentious. Your HO-6 typically covers damage to your personal property and interior, while the master policy should cover damage to the building structure.
Another common issue is claim denials due to excluded perils. Many condo owners mistakenly believe their HO-6 policy covers flood damage—it doesn't. Standard condo policies exclude flooding, earthquakes, sewer backups, and damage from wear and tear or pests. If you live in a flood-prone area, you'll need separate flood insurance through the National Flood Insurance Program or a private insurer.
To avoid disputes and denied claims, document everything. Take photos and videos of your unit's condition and any improvements you've made. Keep receipts for renovations and major purchases. Request a copy of your association's master policy and understand its deductible, coverage type, and exclusions. Review both policies annually—especially when your association changes carriers or coverage limits.
What to Do If You're Losing Coverage in 2026
If you're a California condo owner with Liberty Mutual or Safeco coverage, you'll receive a non-renewal notice well before your policy expires. Don't wait until the last minute to shop for replacement coverage. Start comparing quotes at least 90 days before your current policy ends to avoid gaps in coverage.
When shopping for new coverage, gather information about your association's master policy first. You'll need to know the coverage type (bare walls-in, single entity, or all-in), the deductible amount, and any recent claims history. Armed with this information, you can work with an independent insurance agent who specializes in condo coverage to find a policy that fills the gaps without paying for duplicate coverage.
Even if your current insurer isn't exiting the market, 2026 is a good time to review your coverage. Ask yourself: Have I made improvements or renovations since I last updated my policy? Has my association's master policy changed? Am I carrying enough loss assessment coverage given current deductible levels? A quick policy review now can save you thousands later.
Condo insurance in 2026 requires more attention than ever before. With insurers restructuring their markets, master policy deductibles climbing, and climate-related risks increasing, understanding your coverage isn't optional—it's essential. Take the time to review your HO-6 policy alongside your association's master policy, increase your loss assessment coverage if needed, and work with a knowledgeable agent to ensure you're fully protected. Your condo is likely one of your biggest investments. Make sure your insurance reflects that.
