Before the next special assessment: 5 insurance questions to ask your HOA board

By Daniel Masarsky, CA Lic. 0D87510

Updated October 9, 2026. The decisions that set an owner’s bill after a loss (the deductible, which risks are covered, and how much is in reserves) are usually made months earlier, at a budget meeting few owners attend. Many associations are setting their 2027 budgets this fall. Now is the time to ask questions.

Two recent stories show both sides. The Los Angeles Times reported that owners at the 198-unit Vilamoura at Rancho San Clemente complex were each hit with a $26,000 emergency special assessment to replace roofs. The board’s attorney said the roof and fire-suppression repairs came to $5.2 million in total. Experts quoted by the Times named aging buildings, rising insurance costs and required balcony inspections as reasons large assessments are becoming more common in California.

The other story is more hopeful. Inside Climate News reported that the Tahoe Donner Association near Truckee, with about 25,000 members, got a wildfire resilience policy in 2025 covering more than 1,000 acres of forest and recreation land. The policy came with a 39% lower premium and an 84% lower deductible, based on a model that credited the association’s forest-management work.

The San Clemente assessment was for overdue roof work, not an insurance claim. But insurance gaps are one of the most common ways owners end up with an unexpected bill. These five questions will help you find those gaps before your next renewal.

1. Are our reserves funded for the master policy deductible as well as repairs?

Reserve studies plan for roofs, paint, elevators and paving. They often leave out the association’s share of an insurance claim. If the master policy has a $25,000, $50,000 or percentage-based deductible and the reserves can’t cover it, the shortfall may be passed to owners as an assessment.

Ask what the current reserve balance is and what percentage of the reserve study’s recommended amount it represents.
Ask whether the 2027 budget includes a line for a likely deductible, not only for planned repairs.

2. What is the master policy deductible, and who pays it?

Look at the declarations page, not a summary. Many master policies now carry separate, higher deductibles for wildfire, wind or water damage, and some are a percentage of the building value instead of a flat dollar amount. Then check your CC&Rs and the board’s deductible policy. They decide whether the association absorbs the deductible, charges it to the unit where the damage started, or spreads it across all owners.

Once you know the number, compare it to the loss assessment limit on your own condo (HO-6) policy. That coverage can help pay your share of a covered assessment. A low limit can leave you paying most of it yourself.

3. Does the association carry earthquake coverage?

For Bay Area buildings this is often the biggest question. The California Department of Insurance notes that standard condominium policies don’t cover earthquake damage, and that your HOA’s policy for common areas and the building exterior may not cover earthquake damage either. If the association isn’t insured for earthquake, repairs to the structure after a quake can come back to owners as assessments.

Unit owners have an option. According to the Department, California Earthquake Authority (CEA) condo unit policies provide up to $100,000 toward your share of certain assessments when the association assesses owners for covered earthquake damage. Ask the board whether the master policy includes earthquake. If it doesn’t, ask your broker to quote earthquake coverage for your unit with loss assessment.

4. How is water damage handled?

A leak from one unit often damages several others and the common areas. Ask the board:

Whether the master policy deductible for water damage is different from the main deductible.
Whether water damage has any sublimits or exclusions, such as for gradual leaks or mold.
Where the association’s responsibility ends and the owner’s begins under the CC&Rs, especially for pipes inside walls and for appliance supply lines.

5. Are we getting credit for mitigation work?

Tahoe Donner shows that insurers will reward documented risk reduction when they can measure it. For a Bay Area association, that may mean defensible space and ember-resistant vents in wildfire-prone hills, a new roof, updated fire sprinklers, or automatic water shut-off valves. Ask whether the board has given the current insurer documentation of completed work, with photos, invoices and dates, and whether the broker has used it when shopping the renewal. Work that isn’t documented usually doesn’t earn a credit.

What to do this month

Request the documents: the master policy declarations page, the current reserve study summary, the proposed 2027 budget and the association’s insurance summary.
Write down three numbers: the master policy deductible (including any wildfire, wind or water deductibles), whether the master policy covers earthquake, and the loss assessment limit on your own policy.
Go to the budget meeting. HOA document reviewer Jacquie Berry gave the Times simple advice for owners: “look at the budget, go to the budget meeting, ask questions.”
Ask for a review of your HO-6. Compare your loss assessment limit, your coverage for interior walls and fixtures, and your earthquake options with the master policy.

For more background, see our guides to HOA insurance in California, condo insurance in California, and whether you need earthquake insurance.

FAQ: HOA special assessments and insurance

Can my condo insurance pay for a special assessment?

Sometimes. Loss assessment coverage on a condo (HO-6) policy can help pay your share of an assessment caused by a loss the policy covers, up to your limit. It generally won’t pay for assessments for routine maintenance or overdue repairs, like the roof work in the San Clemente case. Read your policy or ask your broker exactly what triggers the coverage.

How much loss assessment coverage should I carry?

At a minimum, enough to cover your likely share of the master policy deductible. Your broker can help you calculate it from the deductible and your share under the CC&Rs. For earthquake, CEA condo unit policies offer up to $100,000 of loss assessment coverage for covered earthquake damage.

Can mitigation really lower an HOA’s premium?

It can when an insurer can measure the benefit. Tahoe Donner’s 2025 policy came with a 39% lower premium and an 84% lower deductible based on forest-management work.

Talk to ESI before your board sets the 2027 budget

ESI Insurance Brokers (Express Service Insurance Agency, Inc.) is an independent California broker at 2085 Van Ness Avenue in San Francisco. We review master policies for Bay Area associations and HO-6 policies for unit owners, and we’ll tell you plainly where the gaps are.

Request an HOA or condo insurance review →

Or call (415) 440-5136 · CA LIC# 0G83954

Sources

This article is general information, not legal advice or a coverage determination. Your coverage depends on your association’s governing documents and the actual policy terms. Ask your broker or an HOA attorney how this applies to you.