Oregon Condo Insurance: ORS 100.435 Rules and Coverage

Under Oregon law, a condominium board must maintain property and liability insurance paid from common expense funds. Who insures the interior of an individual unit depends directly on what the association’s bylaws say. At The HOA Guide, we explain state condo statutes so boards and unit owners understand their coverage before a loss occurs.

The governing statute is ORS 100.435, which sits inside the Oregon Condominium Act. It lays out the baseline perils a master policy must cover, controls how boards handle deductibles, and establishes the conditions under which unit owners must secure their own policies.

What ORS 100.435 Requires the Board to Insure

State law creates two distinct insurance frameworks based on the wording of the association’s bylaws. The baseline requirements are set under ORS 100.435.

Under the first model, the bylaws give the association sole authority to decide whether to repair or reconstruct a damaged unit, or provide that a unit must be repaired or reconstructed. When those terms apply, the board of directors must obtain, maintain at all times, and pay for out of common expense funds:

• Property insurance covering both the common elements and individual units, including fire, extended coverage, vandalism, and malicious mischief.
• Liability insurance covering the association, the unit owners individually, and the manager, among others.

Under the second model, the bylaws require individual unit owners to insure their own units. When this applies, the board must obtain property insurance on the common elements covering fire, extended coverage, vandalism, and malicious mischief. The board must also secure liability insurance covering the association and the manager. The overall scope of a master policy versus unit coverage is explained in our master policy coverage guide and our HOA insurance vs. homeowners insurance guide.

Waiver of Subrogation Protection

ORS 100.435(3) directs the board of directors to seek specific protection against insurer recovery actions. The board must obtain, if reasonably available, policy terms that provide the insurer’s waiver of subrogation as to any claims against the association’s board of directors.

A waiver of subrogation stops the insurer from paying a property claim and then suing the board members to recover those funds. This clause protects board members who act on behalf of the community. Review our national HOA insurance guide for general standards on how commercial carriers structure these policies.

Deductibles: Who Pays and How the Board Changes the Cap

A condo board holds statutory authority to adjust policy deductibles beyond caps written into older governing documents. Under ORS 100.435(4)-(5), where the declaration or bylaws impose a maximum policy deductible, the board may adopt a resolution authorizing a policy with a higher deductible up to the limit the statute sets. The board must first determine that this change serves the best interest of the association and unit owners after considering factors such as the availability and cost of insurance and the association’s loss experience.

Approach	How Deductible Is Set	Who Decides	Statutory Authority
Document Cap	Fixed maximum stated in declaration or bylaws	Developer or voting owners	Declaration or bylaws
Board Resolution	Adjusted above document cap to statutory limit	Board of directors	ORS 100.435(4)-(5)

For condominiums created before September 27, 2007 whose documents do not assign responsibility for paying the deductible, ORS 100.435(6)-(7) gives the board power to assign it by resolution. That resolution may require unit owners to carry insurance on their unit covering the deductible they may owe, plus comprehensive liability insurance. To cover an owner’s potential assessment for a master policy deductible, individual owners often rely on loss assessment coverage.

Under ORS 100.435(9)-(10), the board must deliver or mail owners a copy of any deductible or claims-procedure resolution within 10 days after adopting it. This notice must advise each owner to contact their insurance agent to determine how the resolution affects their personal coverage.

The Oregon FAIR Plan as Insurer of Last Resort

The Oregon FAIR Plan Association exists for properties that cannot find coverage in the standard insurance market. Created under ORS chapter 735 (ORS 735.005 to 735.145), its statutory purposes include assuring the availability of essential property insurance to owners of insurable property and encouraging the use of the normal insurance market. The statute defines essential property insurance as insurance against direct loss to property as defined and limited in standard fire policies and extended coverage endorsements, plus vandalism and malicious mischief.

The Oregon Division of Financial Regulation (DFR) describes the FAIR Plan as a nonprofit licensed insurance company created by the Legislature in 1971. It is supported by its member companies rather than being a State of Oregon entity. It operates as the state’s insurer of last resort and writes property insurance only for dwellings, commercial property, and farms.

In a May 2023 news release, DFR reported that the FAIR Plan board increased its retention limits for personal and commercial dwellings at DFR’s urging. The agency cited rising statewide wildfire risk, higher housing values, and increased construction costs. Properties facing similar market constraints in neighboring states can review our California condo insurance guide.

Who Regulates Insurance in Oregon

The state’s insurance industry is overseen by the Oregon Division of Financial Regulation (DFR). DFR operates as part of the Department of Consumer and Business Services (DCBS). It regulates commercial carriers, supervises member-supported entities like the Oregon FAIR Plan Association, and enforces the state’s insurance code.

Who This Guidance Does Not Fit

This guidance does not apply to single-family homeowners associations that are not organized as condominiums under ORS chapter 100. It also does not fit a pre-2007 condominium community whose original declaration or bylaws already clearly assign responsibility for paying the policy deductible. Communities with tailored governing documents must follow their existing recorded terms rather than adopting a new statutory allocation.

What Would Change This Guidance

Legislative amendments to ORS 100.435 or ORS chapter 735 by the Oregon Legislative Assembly would alter these requirements. Additionally, administrative actions or coverage limit changes enacted by the Oregon FAIR Plan Association or DFR would change how last-resort coverage operates for commercial properties. Check our condo insurance and reserves hub for wider regulatory updates.

Next Steps for Oregon Condo Boards

Review your association’s declaration and bylaws to identify whether your community operates under the first or second insurance model in ORS 100.435. If your board plans to increase its property deductible, draft the resolution, assess the association’s loss history, and deliver notice to all unit owners within 10 days of the vote.

This is educational information, not insurance or legal advice. A board should confirm its coverage against ORS 100.435 and its own declaration and bylaws with a licensed Oregon insurance broker experienced in condo/HOA master policies, and consult an Oregon community-association attorney for its specific situation.