What's the Difference Between an HO-6 and the Master Policy?
The short version: the HOA master policy insures the building, and your HO-6 insures your unit, your belongings, your liability, and your share of what the association's policy fails to pay. The long version is the rest of this article, because the boundary between those two policies is set building by building — and in Telluride and Mountain Village, where a large share of the housing stock is condominium inventory, that boundary is where most coverage disputes actually happen.
The Master Policy Is Not One Thing
Most condo owners in Telluride and Mountain Village know their association carries a master policy. Far fewer can tell you which *kind* it is — and that single distinction decides whether a burst pipe behind your kitchen wall is the association's problem or yours.
Association master policies generally fall into three forms, and the industry names for them are worth learning because they appear verbatim in your governing documents:
Bare walls-in. The association insures the building structure, the roof, exterior walls, and common areas — and stops at the unfinished interior surfaces of your unit. Drywall, flooring, cabinets, countertops, fixtures, built-ins, and appliances are all yours. This is the most owner-unfriendly form and the one that catches people hardest, because a water loss that starts in a common-element pipe can still leave you paying to replace your own kitchen.
Single entity (sometimes written as "original specifications"). The association insures the unit as it was originally built, including standard interior finishes, but not your upgrades. If the building was delivered with builder-grade carpet and you put in wide-plank oak, the association's policy contemplates the carpet. The delta is yours.
All-in (or "all-inclusive"). The association insures the structure plus interior fixtures and finishes, including improvements, and you are primarily responsible for personal property and liability. This is the most generous form and it is not the most common.
There is no state or local rule that assigns a form to a building. It is set by the association's declaration and reaffirmed every year when the board renews. Two buildings on the same street in Mountain Village can carry different forms, and a building can change forms at renewal without any owner noticing unless someone reads the new certificate.
Finding Out Which One You Actually Have
Do not rely on what the property manager says on the phone, and do not rely on what your neighbor told you. Get two documents:
1. The recorded declaration and CC&Rs. These contain the insurance article that defines what the association is obligated to insure. The language you are hunting for describes the boundary — "unfinished surfaces," "as originally constructed," "including betterments and improvements." That phrase is the whole answer. 2. The current certificate of insurance (COI) or the master policy declarations page. This tells you the actual limits and, critically, the master deductible in force this year — not the one from three years ago.
Associations are generally accustomed to producing both for owners and lenders. Ask in writing, keep the response, and re-ask every year at renewal. An annual COI in a folder is the cheapest insurance homework there is.
What Your HO-6 Is For
The HO-6 is the condominium unit-owners form, and it is built specifically to sit on top of a master policy rather than duplicate it. Its main jobs:
Dwelling / Coverage A — the interior. This is the piece that fills the gap the master policy leaves. On a bare-walls building it needs to be large enough to rebuild your entire interior: drywall, flooring, cabinetry, counters, plumbing fixtures, lighting, built-in appliances. On an all-in building it can be much smaller. Sizing Coverage A by guessing is the most common and most expensive mistake in condo insurance, and in a market where interior finish work has to be scheduled and hauled up a canyon, guessing low is very easy to do.
Personal property. Your furniture, clothing, skis, bikes, electronics. No master policy of any form covers these.
Loss of use. If a covered loss makes the unit uninhabitable, this pays for somewhere else to stay. In a town where nightly rates in February are what they are, this coverage is worth more here than the same limit would be worth almost anywhere else.
Personal liability. For injuries or damage you are responsible for, including damage that originates in your unit and travels into someone else's.
Loss assessment. Discussed below, and the one to pay attention to.
Who Pays the Condo Master Policy Deductible?
This is the question that decides most of the money, and the answer is rarely "the association" in any final sense. The association pays the deductible out of its own funds if it has them — and if it does not, or if its governing documents allow it, the shortfall is passed to the owners as a special assessment. The deductible does not vanish because the association wrote the check first.
Which makes the next section the most important one in this article.
Loss Assessment: The Coverage Nobody Reads Until They Are Assessed
When the association suffers a loss that its master policy does not fully pay — because of a deductible, a limit, or an exclusion — it can assess the owners for the shortfall. Your share arrives as a bill, and it is not optional.
Loss assessment coverage on an HO-6 is designed to respond to exactly that bill. It is standard on most condo forms, and it is frequently included at a very low default limit that has not been revisited since the policy was written. That default was set for a world of modest assessments.
Two things make this coverage disproportionately important on mountain condominium property:
Master deductibles have moved. As property insurance has tightened on wildfire- and weather-exposed Colorado buildings, associations have absorbed premium increases partly by accepting much larger master deductibles. A large master deductible does not disappear — when there is a claim, it gets distributed across the ownership. The owner's exposure to an assessment scales directly with a number set in a board meeting they may not have attended.
Some deductible assessments are not covered by default. This is the trap. A number of HO-6 forms cover loss assessments generally but treat an assessment that represents *the association's master policy deductible* differently, or cap it separately. There is often a specific endorsement for assessments arising from the master deductible. If your loss assessment limit is low and your form handles deductible assessments narrowly, you can be exposed to a five-figure bill while technically holding "loss assessment coverage."
Ask your agent two direct questions: what is my loss assessment limit, and does it respond to an assessment that is purely the association's deductible? Then compare the answer to the master deductible on this year's COI.
How Much Loss Assessment Coverage Do I Need, and Is It Worth It?
It is one of the least expensive coverages on an HO-6 — raising the limit typically costs very little relative to what it protects against, which is why the honest answer to "is it worth it" is almost always yes for a mountain condominium owner.
Sizing it is a two-number exercise. Take the master policy deductible from this year's certificate, and divide by your ownership percentage as stated in the declaration — that is your rough exposure to a single full-deductible event. Then make sure your loss assessment limit is at least that, and confirm the deductible-assessment question above. Owners in small associations are often surprised here: the fewer units share the deductible, the larger each owner's slice, so a ten-unit building can carry more per-owner exposure than a hundred-unit one with the same deductible.
Assessments can also arise from liability losses that exceed the association's limits, not just property deductibles — a serious injury claim in a common area is the classic example. Loss assessment coverage generally responds to both.
The Losses That Actually Happen Here
Water, over and over. The dominant condo claim in a cold, high-elevation building is not fire — it is water. A supply line fails on the third floor and the loss travels through two units below it. Determining whose insurance pays involves the master policy form, the location of the failed component (common element or in-unit), and whether anyone was negligent. Owners who assumed "the building has insurance" discover that the building's insurance covers the building, and their interior is theirs.
Freeze and burst in a unit that sits empty. A large share of Telluride and Mountain Village units are second homes occupied a few weeks a year. A furnace failure in January in an unoccupied unit is a textbook burst-pipe loss, and most policies impose conditions on unoccupied dwellings — maintaining heat, shutting off the water supply, or having the unit checked. Those conditions are contract terms, not suggestions. If you leave the unit for the shoulder season, know exactly what your policy requires of you while you are gone.
Roof, ice dam, and snow load damage. The structure is the association's responsibility, but the interior consequence lands on the owner in a bare-walls or single-entity building. Ice damming that pushes meltwater back under shingles and into a top-floor unit is a common winter loss in the San Juans, and the split between master and HO-6 follows the same boundary as everything else.
Short-term rental activity. Many units here are rented nightly, and this changes the analysis completely — an HO-6 written for owner-occupancy is not built for a rotating stream of paying guests. If you rent your unit at all, your carrier needs to know, and the association's rules on rentals need to be checked against what you are actually doing. Undisclosed rental use is one of the cleanest ways to have a claim denied.
A Practical Annual Checklist
Once a year, ideally right after the association's renewal:
- Request the current master policy COI and read the deductible, not just the limits.
- Confirm which master policy form the declaration establishes, in writing.
- Re-check your HO-6 Coverage A against what it would actually cost to rebuild your interior at current mountain construction pricing — not what it cost when you bought.
- Review your loss assessment limit against the master deductible, and ask specifically about deductible assessments.
- Disclose your actual occupancy and rental use. Every year, honestly.
- If you leave the unit vacant for stretches, confirm what your policy requires of you during those periods.
The Bottom Line
A condominium in Telluride or Mountain Village is insured by two policies that are supposed to meet cleanly at a line drawn in a recorded document most owners have never read. When they meet cleanly, condo insurance is simple and inexpensive. When they do not — because the master form is bare-walls and Coverage A was sized for an all-in building, or because the master deductible grew and the loss assessment limit did not — the gap shows up as a bill, at the worst possible moment.
The fix is not expensive. It is an afternoon of document-gathering and one conversation with an agent who will actually read the declaration alongside your policy.
Request a condo coverage review online, or call 844-967-5247, and we will read your association's master policy against your HO-6 and tell you exactly where the line falls in your building.