Massachusetts Condo Association Insurance: Master Policy, D&O and Chapter 183A

A lot of Massachusetts condominiums are small. A Somerville triple-decker split into three units, a brick row house in the South End turned into four, a converted Victorian in Newton or Salem, a dozen townhouses in a Worcester suburb. Many have no management company, so a few volunteer trustees end up making the insurance decisions: what the master policy covers, how large the deductible is, and who pays after a loss.

Portsmouth Atlantic Insurance is an independent agency licensed in Massachusetts, and we work with 40+ carriers. On the commercial side we write habitational risks, including condominium association master policies. In Massachusetts, the carriers we work with for master policies include Safety Insurance, Concord Group, Vermont Mutual, Andover Companies and Providence Mutual. Which one fits depends on the building, its age, its location and what your condominium documents require.

Massachusetts condo law: Chapter 183A

Massachusetts condominiums are created and governed under Chapter 183A of the General Laws. A few sections matter most for insurance:

• The master deed (§ 8). It’s recorded at the registry of deeds and describes the buildings, the units, the common areas and facilities, and each unit’s percentage interest. Unit boundaries in the master deed help decide where the master policy stops and each owner’s policy begins.
• The organization of unit owners (§ 10). It can be a corporation, a trust or an unincorporated association. In Massachusetts it’s very often a condominium trust run by trustees. Section 10 gives it the power to obtain insurance on the common areas and facilities, written in its name, without limiting each owner’s right to insure his or her own unit.
• Common expenses and the lien (§ 6). Common expenses are assessed by percentage interest (or another method stated in the master deed), based on a budget adopted at least annually, and the organization has a lien on a unit for unpaid assessments. If an expense comes from an owner’s failure to follow the documents, or from misconduct by an owner or the owner’s family, tenants or guests, the organization may assess that expense against that unit alone.
• Rebuilding after a casualty (§ 17). If a loss is no more than 10% of the condominium’s value, common areas are rebuilt with common funds, including insurance proceeds. Larger losses trigger a different process, including a 75% owner vote within 120 days on whether to restore.

Unlike some states, Chapter 183A doesn’t spell out a detailed list of required coverages, so your master deed, trust and bylaws usually set the specifics. That makes the documents especially important. Have your association’s attorney confirm what they require.

Source: M.G.L. Chapter 183A, Condominiums (Massachusetts Legislature)

What a Massachusetts master policy package usually includes

• Property: the buildings and common areas, insured to replacement cost
• General liability: injuries on common stairs, porches, decks, walkways, driveways and parking
• Directors and officers (D&O): protection for trustees and officers for decisions they make as volunteers
• Fidelity / crime: protection for association funds against theft by someone who handles money
• Optional: umbrella or excess liability, equipment breakdown, ordinance or law, and water or sewer backup

Bare walls, original specs or all-in?

Your master deed and bylaws decide what the master policy covers inside each unit.

• Bare walls: the master policy covers the structure, and each owner insures interior finishes, cabinets, fixtures and flooring.
• Original specifications (single entity): the master policy covers the unit as originally built, and owners insure upgrades.
• All-in: the master policy also covers improvements owners have made. Owners still need an HO-6 policy for belongings, liability, loss assessment and their share of the deductible.

Small Massachusetts associations, especially converted two- and three-family houses, sometimes have documents written decades ago that don’t say clearly which approach applies. If yours is vague, ask your attorney before a loss forces the question. Each renewal, send owners a one-page summary of what the master policy covers, the deductible and who pays it, so they can match their own condo (HO-6) policies.

Deductibles, reserves and loss assessment

1. Who pays the deductible. Bylaws may charge it to the unit where the loss started, or treat it as a common expense. Section 6 lets the organization assess an expense caused by an owner’s failure to follow the documents against that owner’s unit.
2. Reserves. A small budget with thin reserves can turn one water loss into a special assessment for every owner.
3. Wind and named-storm deductibles. On the Cape, the Islands, the South Shore and the North Shore, coastal policies may carry a separate, larger deductible for wind or named storms.
4. HO-6 loss assessment coverage. Each owner’s HO-6 can include loss assessment coverage, which can help pay an owner’s share of an assessment from a covered loss to common property, up to that limit and subject to policy terms. Many policies start with a low limit that owners can raise.

Two-unit condos

A two-family house split into two condominium units, often called a condex, is very common in Massachusetts. Two owners have to agree on a master policy, or decide whether each owner insures part of the structure, and a disagreement can stall a claim. We have a separate guide for that setup: condex insurance in Massachusetts.

Older buildings, code upgrades and lead

Converted Boston-area buildings often date to the late 1800s or early 1900s. Old wiring, steam heat, porches and fire escapes affect underwriting, and repairs after a loss must meet current code, so ordinance or law coverage deserves a close look. Many converted units were built before 1978. If owners rent their units, the Massachusetts Lead Law (M.G.L. c. 111, § 197) applies to unit owners whose tenants include a child under six, and lead work in common areas can become an association question. Lead claims are often limited or excluded on liability policies, so ask how your quote treats them.

Water losses in stacked units

In a converted triple-decker, units are stacked. A burst pipe or failed washer hose on the third floor can soak the second and first floors, plus common hallways. Frozen pipes during a January cold snap, ice dams on older roofs and failed boiler lines are common winter claims. Boards should decide ahead of time how the documents assign responsibility for water that starts inside one unit, set a deductible owners can actually afford, and encourage leak sensors and shut-off valves. Owners should check that their HO-6 and loss assessment limits line up with that deductible.

Units rented to tenants

Many Massachusetts condo owners rent their units. The master policy doesn’t insure an owner’s rental income or personal liability as a landlord. Owners who rent usually need a condo policy written for a rented unit. Some associations require proof of that coverage in their rules. See our Massachusetts landlord insurance page.

D&O and fidelity for volunteer trustees

Trustees of a small association hire contractors, approve budgets, collect common charges and enforce rules. An owner who disagrees can sue. D&O coverage helps defend trustees for those decisions. Check whether it covers claims about property management decisions, claims seeking non-monetary relief, and former trustees. Fidelity or crime coverage protects association funds when one treasurer controls the bank account; set the limit at least as high as the most money the association holds at once, including reserves.

Coastal and riverfront associations

Standard master policies exclude flood. For a building that’s at least 75% residential, the NFIP’s main option is the Residential Condominium Building Association Policy (RCBAP), and private flood may also be available. Associations in Hull, Scituate, Revere, Winthrop, Gloucester, the Cape and the Islands should review flood and wind together. See our flood insurance page. Source: FEMA NFIP Summary of Coverage: Residential Condominium Buildings.

What a board should send for a review

1. Master deed, condominium trust and bylaws, especially unit boundaries and the insurance provisions
2. Current master policy declarations page and renewal
3. Number of units, year built, construction and update dates
4. Most recent budget and reserve balance
5. 3-5 years of loss history

Why associations work with Portsmouth Atlantic Insurance

We’re family-owned, founded in 2005, and hold an A+ BBB rating. We have 1,000+ Google reviews and over 2,000 testimonials, and we’re New Hampshire’s highest-rated agency on Google. We don’t charge any fees. Unit owners who rent out their condos can also see our Massachusetts landlord insurance page.

Associations in other states: see Connecticut condo association insurance, small condo association insurance in New Hampshire and Maine condo association insurance. Own a 5+ unit rental building? See Massachusetts apartment building insurance.

Run a self-managed association of 2 to 10 units? See our guide to small condo association insurance in Massachusetts, plus town guides for Salem condo association insurance and Hingham condo association insurance.

Frequently asked questions

Is a Massachusetts condo association required to carry a master policy?

Chapter 183A (§ 10) gives the organization of unit owners the power to insure the common areas and facilities in its name. The specific requirements usually come from your master deed, trust and bylaws, so have your attorney confirm what they require.

What is a condominium trust?

In Massachusetts, the organization of unit owners is often set up as a trust run by trustees. The trust manages the common areas, collects common charges and usually buys the master policy.

Who pays the master policy deductible?

It depends on your documents. Some charge it to the unit where the loss started, and others treat it as a common expense. Under § 6 of Chapter 183A, an expense caused by an owner’s failure to follow the documents or by misconduct can be assessed to that owner’s unit.

What is the difference between bare walls and all-in coverage?

Bare walls covers the structure, and owners insure interior finishes. All-in also covers improvements owners have made. Your master deed and bylaws decide which applies.

Does a small Massachusetts association need D&O and fidelity coverage?

Small, self-managed boards are exposed to both. D&O helps defend trustees for decisions they make, and fidelity protects association funds from theft.

Is flood covered by a condo master policy?

No. Associations need a separate NFIP RCBAP or private flood policy.

Which carriers do you work with for Massachusetts condo associations?

For master policies in Massachusetts, the carriers we work with include Safety Insurance, Concord Group, Vermont Mutual, Andover Companies and Providence Mutual. The right fit depends on the building and the documents.

Ready for a review? Request a quote or call us at (603) 431-4020.