Bare Walls Coverage

A bare walls insurance policy covers communally used features in multi-family residential buildings. Bare walls coverage is commonly found in condominium association master policies.

Understanding Bare Walls Coverage

When the structure of a building is shared by many different people, it is difficult for any one person to carry the insurance policy on the property. This can refer to areas such as entryways or firewalls between units in multifamily homes or condominiums. The association purchases this insurance policy because a single unit owner cannot be required to purchase a policy covering these items. The premiums for this policy are usually included in the fees charged by the associations.

Only common areas are covered by bare walls. Individual unit owners must purchase their own policies to cover any damage or loss to their property. This includes fixtures, personal belongings, and liability for injuries sustained within their units.

A master policy is another term for this type of bare walls policy. The policy purchased by the unit owner is known as a HO6 policy—or contents insurance. It is also known as walls in or studs in insurance because the protections begin where the bare walls policy ends.

Example of Bare Walls Coverage

At first glance, it may appear that the condominium association's master insurance policy would cover all of a condominium dweller's property. Consider the following example. Beth Jones lives in a four-unit condo complex that is managed by a condominium association. The association has a master insurance policy that includes coverage for bare walls. A fire breaks out in one of the units one night, destroying the entire building. Beth returns home from work to discover that she has misplaced everything. Fortunately, Beth took out contents insurance at the insistence of her mortgage lender. That policy covered all of Beth's personal property inside her unit, as well as the building materials from the studs up. Beth will be able to have her unit rebuilt almost exactly as it was before when the condo association rebuilds the building.

The stairwell between floors, as well as the laundry room and exercise facility in the basement, will be covered by bare walls because these are common areas that do not belong to any unit owner.

Consider Beth's neighbor Leslie, who owned her unit outright and did not keep her contents policy up to date. She will have to pay for all of her lost possessions out of her own pocket. Leslie's unit will only be rebuilt to the interior studs as the reconstruction concludes. Leslie will have to pay for all of the remaining materials, fixtures, and appliances herself.