The setup
- Building
- Two-story attached townhomes from the 1980s, four units per building
- Association
- An HOA with a master policy and a management company
- Unit owners
- Each with their own unit policy, often called an HO-6
- Fire
- A stovetop oil fire in an end unit's kitchen
How it plays out
Illustrative example. Not a real job or customer.
An owner leaves a pan of oil heating and steps away. It ignites, flames reach the range hood and upper cabinets, and the owner gets out and calls 911. Firefighters put the fire out with limited water, but smoke has filled the unit and seeped through gaps around plumbing and outlets into the next unit, where a neighbor notices a burnt smell in a bedroom closet.
- Both owners call their own insurers. The unit owner also notifies the HOA's management company the same day.
- The management company asks for photos and opens a claim on the master policy for the building elements.
- A restorer selected with the association's knowledge assesses both units and the attic above them, which is shared across the building.
- The declarations show the master policy covers the structure and common elements, while each unit policy covers interior finishes, improvements and contents, subject to deductibles.
- Cleanup proceeds in both units under coordinated scopes. Kitchen cabinets, the hood and part of the ceiling in the fire unit are replaced; the neighbor's unit needs cleaning, sealing in the closet and repainting.
- The attic over both units is cleaned and partly reinsulated under the master policy.
Both units are restored. The process takes longer than a single-family fire would, mainly because three policies and the association had to agree on who paid for what.
Who often covers what in a townhome fire
| Element | Often covered by | Check |
|---|---|---|
| Roof, exterior walls, shared attic | HOA master policy | Declarations and master policy summary |
| Party wall framing | Varies | Whether the HOA or owners own walls to the studs |
| Cabinets, flooring, interior paint | Unit owner's policy | Bare walls versus all-in master policies |
| Contents and personal property | Unit owner's policy | Contents limit on your HO-6 |
| Master policy deductible | Assessed to owners in some associations | Loss assessment coverage on your HO-6 |
Questions townhome and condo owners should ask now
- Does our master policy cover interior finishes, or only bare walls?
- How is the master policy deductible handled when a fire starts in one unit?
- Does my unit policy include loss assessment coverage, and how much?
- Who in the association authorizes emergency work on shared elements?
Common questions
In this example, why did the neighbor file with their own insurer?
Owners usually go to their own policy first for damage to their unit and belongings. Insurers may later sort out responsibility between themselves, which the owners do not need to wait for.
General information for Centennial, not a quote or professional advice. In an emergency, call 911.