Condo master insurance: what lenders need to see.
Help your board and insurance agent answer the coverage questions that can hold up a condominium project review.
Which deductible limit applies?
Fannie Mae distinguishes per-occurrence and per-unit deductibles. A percentage deductible should not simply be divided by unit count and tested against a per-unit cap.
| Deductible structure | Fannie Mae maximum for required property perils |
|---|---|
| Per occurrence | 5% of the master property insurance coverage amount. |
| Per unit | $50,000 per unit; an individual unit owner property policy is also required. |
If separate deductibles apply to different required perils, each must satisfy its applicable limit. Ask the agent to identify the policy structure and relevant endorsements in writing.
What documents should the association gather?
- Current master property policy and declarations.
- Deductible schedules, exclusions and endorsements, including wind and named-storm provisions.
- Evidence supporting replacement cost and the coverage amount.
- Flood documents where applicable, plus liability and fidelity records requested for the review.
- Renewal dates and the insurance agent’s contact details.
Why a certificate may not be enough
A certificate summarizes coverage. The policy and endorsements establish the terms. When a lender asks about an exclusion or deductible, request the underlying document rather than relying on a summary.
Who resolves a coverage question?
The insurance agent or carrier explains the policy and available coverage. The lender determines whether it meets the applicable financing requirements. Condo Consult reviews the documentation and identifies questions for follow-up; we do not sell insurance.
For coastal associations, start with our Alabama page. Insurance needs depend on the actual property and policy.
Primary sources
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