Maryland Condo Insurance Requirements and Deductibles

Under Maryland law, a condominium council of unit owners must maintain both property and comprehensive general liability insurance. When property damage originates from an individual unit, that specific unit owner is responsible for the council’s property insurance deductible up to a statutory cap of $10,000. At The HOA Guide, we review state condominium statutes to help board members and owners understand where association responsibility ends and personal risk begins.

What Maryland Law Requires the Council of Unit Owners to Insure

Maryland law mandates specific insurance coverage for every condominium community in the state. Under Real Property § 11-114, the council of unit owners must maintain property insurance against risks of direct physical loss commonly insured against, to the extent reasonably available. This legal requirement begins no later than the first conveyance of a unit to an owner other than the developer.

The council of unit owners determines the coverage amounts for this property policy. The condominium declaration or bylaws may also direct the council to secure additional insurance policies beyond the statutory minimum.

Section 11-114 also requires the council to maintain comprehensive general liability insurance, including medical payments coverage. The council of unit owners determines the policy limits for this liability protection. To evaluate broader industry approaches to association coverage limits, review our resource on what HOA insurance covers and our detailed look at the HOA master policy.

Who Pays the Deductible When Damage Starts in a Unit

Responsibility for a property insurance deductible in Maryland depends on where the cause of the damage begins. Under Real Property § 11-114, if the cause of damage to any portion of the condominium originates from an individual unit, the owner of that unit is responsible for the council’s property insurance deductible, not to exceed $10,000.

This statutory rule changes how an association and an individual owner resolve a property claim. The framework creates two distinct scenarios:

• Damage originating within a unit: The individual owner pays the council’s property insurance deductible, subject to the $10,000 statutory cap.
• Damage originating outside a unit: The council pays the master policy deductible as an association common expense.

This statutory provision prevents the council from transferring an unlimited deductible obligation onto an owner when an accident occurs inside that owner’s home. Individual owners often rely on personal coverage to cushion this expense. You can review how separate personal policies function in our overview of HO-6 insurance and our analysis of loss assessment coverage.

What the Master Policy Gives Individual Owners

The master policy provides direct legal protections to every person who owns a home in the condominium. Policies maintained under § 11-114 must protect unit owners for liability arising from their interest in the common elements. The policy must also include a waiver of the insurer’s right of subrogation against any unit owner.

The master policy must serve as primary coverage whenever another insurance policy covers the exact same risk. While the council carries this overarching protection, unit owners may obtain separate insurance for their own benefit.

Understanding the separation between shared common elements and individual dwellings is vital for proper coverage. See our guide comparing HOA insurance vs. homeowners insurance to examine how individual and community policies interact. For broader statutory context from other jurisdictions, compare these rules with Nevada condo insurance.

Policy Termination Notice

A condo council cannot quietly let its insurance coverage lapse. The council must give notice to all unit owners of the termination of any insurance policy within 10 days of termination. This statutory notice window ensures owners have immediate knowledge if the property loses master protection.

Where the Insurance Money Goes After a Covered Loss

Insurance proceeds from a master policy claim are held in trust by an insurance trustee or by the council of unit owners. These proceeds must be used first for repair or restoration of the damaged property.

The damaged property must be repaired unless one of three specific statutory conditions occurs:

• The condominium regime is formally terminated.
• Reconstruction of the damaged property would violate state or local health or safety codes.
• 80 percent of the unit owners vote against rebuilding.

Unless one of these three conditions is met, the council must apply the held proceeds directly to rebuilding the damaged condominium property.

The Regulator: Maryland Insurance Administration

State-level regulatory oversight falls under a single dedicated agency. The Maryland Insurance Administration is the state agency that handles insurance consumer complaints, licensing, and education in Maryland.

Individual owners seeking educational publications can review resources maintained by the agency. The administration’s consumer pages address homeowners and renters insurance and flood insurance topics across the state. If you are examining professional management oversight for community operations, read our guide on Maryland HOA management companies.

Who This Guidance Does Not Fit

This guidance applies specifically to residential condominiums governed by the Maryland Condominium Act. It does not apply to single-family homeowners associations that are not formed as condominiums, nor does it address condominiums made up entirely of nonresidential commercial units.

What Would Change This Guidance

Two primary developments would change the analysis provided here. First, statutory amendments by the Maryland General Assembly to Real Property § 11-114, particularly changes adjusting the $10,000 deductible cap or mandatory notice periods, would alter council requirements. Second, stricter insurance mandates adopted within an association’s specific declaration or bylaws can impose broader obligations on a local council.

Legal and Insurance Guidance Notice

This is educational information, not insurance or legal advice. A council or board should confirm its coverage against Real Property § 11-114 with a licensed Maryland insurance broker experienced in condo/HOA master policies, and consult a Maryland community-association attorney for its specific situation. To explore national providers writing association policies, review our summary of the best HOA insurance companies or explore our broader HOA insurance hub.