Walls-In Condominium and Townhouse Homeowner Association Insurance
The Insurance Section of your HOA CC&Rs (Covenants Conditions and Restrictions) should describe how the HOA insurance is to insure the inside of your unit (also known as Walls-In Coverage) and is typically written in one of three ways: 1. Bare Walls, 2. Per Original Construction (aka Single Limit) 3. All Inclusive Improvements/Betterments/Upgrades.
1. Bare Walls insurance coverage means that after a covered property damage claim, the HOA policy will rebuild the perimeter walls (and sometimes load-bearing walls) (to the studs or taped dry wall) and roof of the structure, but that the unit owner will be left with an empty shell. The unit owner (or the unit owner’s insurance carrier) will then be responsible to reconstruct the interior walls, cabinets, counter tops, shelves, vanities, etc.
2. Per Original Construction aka Single Limit specifications coverage means that the HOA policy will rebuild the perimeter walls and all of the interior fixtures including interior walls, cabinets, counter tops utilizing “Like-kind and Quality Materials” as installed by the original builder, but will NOT insure the value of any Upgrades or Betterments installed by current or prior Owners after original construction was complete.
3. All Inclusive insurance coverage means that the HOA policy will insure all of the interior original improvements PLUS also insure all Upgrades or Betterments installed after original construction was complete. Examples of Upgrades and Betterments include granite counter tops (that replaced tile), custom cabinets (that replaced standard builder’s grade) custom carpet (that replaced standard builder’s grade) hardwood floor (that replaced carpet).