Utah condo and townhome insurance
Utah law expressly allows a condominium association to assess its insurance deductible to the unit owner where the loss originated. That single rule is why Utah condo owners need to look at loss assessment coverage.
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Three things to settle before you buy a Utah condo policy
- 1
The association can send you its deductible, by statute
Utah’s community association law allows an association to assess the master policy deductible to the owner of the unit where the loss began. That is not buried in one set of documents — it is the statutory default. Building deductibles on Wasatch Front associations commonly run into five figures, which means a failed washing machine hose can produce a bill for the full deductible with your name on it.
- 2
Loss assessment coverage is the answer, and the default is too small
Loss assessment on an HO-6 is what responds when the association charges you. The limit written into most policies by default was set long before building deductibles reached their current size. Read the master policy deductible off the declaration page, then set your loss assessment limit to at least that figure. It is one of the least expensive lines on the policy.
- 3
Bare walls and all-in are different purchases
A bare-walls master policy stops at unfinished structure and leaves cabinets, flooring, fixtures and built-ins to you. An all-in policy reaches original finishes but not your upgrades. Your dwelling limit has to be set against whichever line the master policy actually draws, which is a document question rather than a guess.
Water is the claim, in every Utah building
Supply lines, washing machine hoses, water heaters and failed shower pans cause more condo claims here than fire and wind combined, and in a stacked building one failure becomes three claims plus the deductible conversation. Replace a water heater past ten years, swap rubber washer hoses for braided ones, and know where the unit shutoff is. If there is a stacked washer-dryer in a closet without a drain pan, say so.
Earthquake, for a unit owner
The association may or may not carry earthquake on the structure, and on the Wasatch Front that question has a real answer either way. If it does not, nobody is insuring the building against the fault under it, and quake damage to common elements can produce an assessment against every owner. Unit-owner earthquake coverage typically responds to your interior, your belongings and loss assessment arising from a quake.
Townhome, or house that looks like one
Utah has a great deal of fee-simple townhome and rowhouse construction where you own the structure and the ground under it, with an association that maintains the common areas and insures nothing of yours. That is a homeowners policy, not a condo policy, even in a row of eight identical units. Read the recorded declaration before buying either form.
Documents to have in hand
The association should provide all of these on request. The master policy declaration page is the one that matters.
- The declaration page of the association master policy, not the summary
- The master policy deductible — the exact figure, since it sets your loss assessment limit
- Whether the master policy is bare walls or all-in
- Whether the association carries earthquake on the structure
- The recorded declaration, to confirm whether you own the structure or only the interior
- The reserve study date and any special assessment voted in or pending
- The age of the plumbing stack and of your own water heater
Frequently asked questions
Can a Utah HOA charge me its insurance deductible?
Utah community association law allows an association to assess the deductible to the owner of the unit where the loss originated. Read your own documents, but understand that the statutory default runs that way.
How much loss assessment coverage should I carry?
At least the master policy deductible your association could charge you. That figure is printed on the master declaration page, so it is something you can read rather than estimate.
What does an HO-6 condo policy cover?
Your belongings, your liability, your interior finishes and improvements to the extent the master policy does not reach them, loss of use if the unit becomes uninhabitable, and loss assessment from the association.
Do I need a condo policy or a homeowners policy for my townhome?
Ownership decides it. If you own the structure and the land, that is a homeowners policy. If the association owns the building and you own the interior, that is a condo policy.
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