Bare Walls Coverage

Bare walls coverage is an insurance policy that applies to communally used features in multi-family residential buildings. Bare walls coverage is generally found in master policies for condominium associations.

Bare walls coverage is used when the structure of a building is shared by many different people which makes it difficult for any one person to carry the insurance policy on the property. In multifamily houses or condominiums this can reference areas like entryways or firewalls between units. Since a single unit owner cannot be asked to purchase a policy covering these items, the association purchases this insurance policy. Usually the cost of the premiums for this policy are included in the associations fees.

Bare walls coverage only applies to common areas. Individual unit owners will need to purchase their own policies to cover any damages or losses that occur to their property.  This includes fixtures, personal possessions and liability for injury that occurs within their units.

This type of bare walls policy is sometimes also referred to as a master policy. The policy that the unit owner takes out is known as a HO6 policy, or contents insurance. It is sometimes also referred to as walls in or studs in insurance, as the protections begin where the bare walls policy leaves off.

At first glance, it might seem like all of a condominium-dweller's property would be covered by the condominium association’s master insurance policy. However, consider this example. Beth Jones lives in a four-unit condo that is managed by an association. The association has a master insurance policy that includes bare walls coverage. One night, a fire breaks out in one of the units and the entire building is destroyed. Beth arrives home from work to see find that she has lost everything. Fortunately, at the insisting of her mortgage lender, Beth took out a contents insurance policy. All of Beth’s personal property inside of her unit was covered by that policy, as well as the building materials from the studs in. When the condo association rebuilds the building, Beth will be able to have her unit rebuilt almost exactly as it was before.

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

Now consider Beth’s neighbor Leslie, who owned her unit outright and did not maintain her contents policy. She will have to pay out of pocket for all her possessions that were destroyed in the fire. As the reconstruction comes to a close, Leslie’s unit will only be rebuilt to the interior studs. Leslie will have to pay for all remaining materials, fixtures and appliances out of pocket.