Connecticut drops the terrorism coverage mandate from condominium master policies
Connecticut drops the terrorism coverage mandate from condominium master policies
2026-09-09 · Connecticut · Regulation
Connecticut has removed the requirement that a condominium association's master policy cover loss caused by terrorism. The repeal is Section 6 of Public Act 26-69, the Insurance Department's own departmental bill, approved June 2, 2026 and effective from passage.1
It is a small edit to one statute, and it is easy to read past. What it does is convert a coverage floor into a coverage choice.
What the section actually deletes
Section 6 rewrites § 38a-307a. Since 2004 that statute has done two things at once: it barred a terrorism exclusion in condominium master policies, and it permitted one in other commercial risk policies. The act strikes the first half.
The repealed language required that, for “any master policy that is required to be purchased by a condominium association pursuant to section 47-83 or by a unit owners' association pursuant to section 47-255, the standard form of fire insurance policy set forth in section 38a-307 shall not exclude coverage for loss by fire or other perils insured against in the policy caused, directly or indirectly, by terrorism, as defined by the Insurance Commissioner.”1
What remains is the permissive rule, now applying to commercial risk policies generally: an insurer may exclude terrorism losses “provided the premiums charged for such policy shall reflect any savings projected from the exclusion of such perils.”1
The statutes it cross-referenced
The deleted clause reached both of Connecticut's association regimes: § 47-83, the master policy duty under the older Condominium Act, and § 47-255, the insurance provision of the Common Interest Ownership Act. Those duties are untouched. An association still has to carry property and liability coverage on the scale CIOA requires; what changed is that the policy satisfying that duty may now come with a terrorism exclusion.
What boards have to decide now
Before June 2, 2026 the answer to “does our master policy cover terrorism?” was supplied by statute. It no longer is, and that lands on the executive board as a live coverage question at every renewal.
The exclusion is permissive, not automatic. Nothing in the act strips terrorism coverage from an existing policy or requires an insurer to exclude it. It removes the prohibition. Whether a given Connecticut association's master policy still covers terrorism after its next renewal depends on what the insurer offers and what the board buys.
The savings are supposed to be visible. The surviving text conditions any exclusion on premiums that “reflect any savings projected from the exclusion of such perils.” A board presented with a policy carrying a new terrorism exclusion has a statutory basis for asking what the exclusion is worth in premium terms — and for putting the answer in the minutes.
Check the declaration before assuming the board decides. Some Connecticut declarations and bylaws specify coverage lines the association must carry. Where a governing document requires coverage the statute no longer does, the governing document still governs. This is the first thing to look at, not the last.
Where it sits in the act
Public Act 26-69 is titled “An Act Concerning the Insurance Department's Recommendations for Revisions to the Insurance Statutes” — a fifty-three page departmental bill covering service of process, filings and a long list of technical amendments. Section 6 is the only part of it that reaches community associations.1
The bill was reported by the Insurance and Real Estate Committee, passed the House as amended by House Amendment Schedule A, was adopted in the same form by the Senate, and was signed on June 2, 2026.2 Unlike most of the act, Section 6 took effect immediately on passage rather than on the following October 1.
The federal backdrop, and why the deadline in the statute matters
Both the repealed clause and the surviving one are framed by the same time limit: they run “until the expiration of the Terrorism Insurance Program established in the federal Terrorism Risk Insurance Act of 2002, P.L. 107-297, as amended and reauthorized from time to time.” The federal programme is the reinsurance backstop that makes terrorism coverage affordable to write at all. Connecticut's rule was always scaffolding around it.
Read that way, the repeal is less a judgement about terrorism risk than a decision to stop having a state mandate sit on top of a federal programme whose own future is set in Washington on a reauthorisation cycle.
What to watch next
The practical question is whether Connecticut master policies actually change. Terrorism coverage in commercial property programmes is frequently priced at a small fraction of total premium, and an insurer that has been writing it in Connecticut for twenty-two years under a statutory requirement may simply continue to offer it.
The one to watch is the smaller association under premium pressure. Connecticut's homeowners market contracted in 2025, with four carriers notifying the Insurance Department of their intent to withdraw, and the Commissioner's own rate report attributes rate pressure in part to reinsurance costs.3 A board looking for a line to cut now has one the legislature has just made cuttable.
Related Connecticut HOA Topics
- Public Act No. 26-69 (Substitute House Bill No. 5373), full enrolled text — Section 6 repeals and substitutes Conn. Gen. Stat. § 38a-307a; approved June 2, 2026 ↩
- HB 5373 bill status and history, Connecticut General Assembly ↩
- Property Casualty Insurance Rate Reviews for Calendar Year 2025, Connecticut Insurance Department (January 15, 2026) ↩
- 2026 Acts Affecting Housing and Real Estate, OLR Report 2026-R-0090 (June 15, 2026) ↩
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