Indiana HOA Insurance Requirements

Section 1 — Overview: How HOA insurance is regulated in Indiana

Indiana regulates condominium insurance through a traditional horizontal property act that runs thin on insurance, and it imposes no statutory insurance mandate on non-condominium planned communities, which rely on the recorded declaration.^1,3 The condominium track is the Indiana Condominium Act, Ind. Code § 32-25, a traditional horizontal property statute rather than an adoption of the 1980 Uniform Condominium Act or the 1982 Uniform Common Interest Ownership Act.² The Act's insurance provision stays traditional and short: it requires the association of co-owners to carry a master casualty policy and a master liability policy, and it sets rules for applying proceeds after a casualty, while the master deed, declaration, and bylaws carry the operational detail.^1,7 Planned communities have no dedicated insurance statute; their coverage runs entirely off the recorded CC&Rs, with corporate scaffolding from the Indiana Nonprofit Corporation Act of 1991, Ind. Code § 23-17, wherever the association incorporates.^3,6 Fidelity (crime) and directors-and-officers coverage carry no statutory mandate in Indiana; declarations or lenders typically drive them instead.^1,6,4 For financed condominiums, lender and federal requirements often set the effective coverage floor because the statute requires so little.^4,5 Nationally, Indiana sits at the lighter-touch end: a CC&R-primary state for planned communities and a traditional-statute state for condominiums, apart from UCA/UCIOA condominium-mandate states and from prescriptive states such as Florida and California. The sections ahead map the statute, how coverage gets allocated, and the federal overlay.

Section 2 — The statutory insurance framework

2A. The Indiana Condominium Act and its insurance treatment

The Indiana Condominium Act appears at Ind. Code § 32-25, and its insurance provision is Ind. Code § 32-25-8-9 ("Insurance; co-owners"), supported by the reconstruction sections at §§ 32-25-8-10, -11, and -12.^1,7,8,9 The Act is a traditional horizontal property statute, not an adoption of the 1980 Uniform Condominium Act or the 1982 UCIOA, so it doesn't carry the machinery those uniform acts place in Section 3-113.² Section 32-25-8-9(a) requires the co-owners, through the association, to purchase two policies: a master casualty policy "affording fire and extended coverage in an amount consonant with the full replacement value of the improvement that in whole or in part comprises the common areas and facilities," payable as a common expense; and a master liability policy in an amount set by the bylaws, the declaration, or the board.¹ Section 32-25-8-9(d) requires the association to notify each co-owner and affected mortgagee when a policy is obtained, changed, or terminated.¹ That's the extent of the mandate. The Act doesn't contain the features associated with the uniform-act model: no commercial general liability mandate with a fixed minimum, no "reasonably available" qualifier, no improvements-and-betterments exclusion, and no structured deductible-allocation scheme.¹ Its one valuation instruction is the "full replacement value" reference for the common-area improvements; beyond that, the coverage amount for liability and the treatment of deductibles get left to the governing documents.¹ Because the statute stops there, the master deed, declaration, and bylaws carry the operational detail, including what counts as a common area, who insures unit interiors, and how deductibles get borne. Indiana courts read those documents closely; the definition of "common areas and facilities" itself applies "unless otherwise provided in the declaration."¹

2B. Planned communities and the absence of a statutory mandate

Non-condominium planned-community HOAs have no dedicated insurance statute and no statutory insurance mandate. Their coverage runs entirely off the recorded declaration.³ Indiana does have a limited Homeowners Associations statute, Ind. Code § 32-25.5, which addresses budgets, records, member meetings, governance, and grievance resolution for associations formed after June 30, 2009, but it imposes no association insurance scheme and shouldn't be treated as a planned-community insurance statute.³ The order of precedence differs by community type. For condominiums, the Act governs to the limited extent it speaks to insurance, then the master deed and declaration, then the bylaws, then the rules.¹ For planned communities, the declaration takes the lead, and no overriding insurance statute displaces it.³ Where the association incorporates, the Indiana Nonprofit Corporation Act of 1991, Ind. Code § 23-17, supplies corporate context for director conduct and indemnification; it permits, but doesn't require, the corporation to indemnify directors and officers and to purchase insurance on their behalf, and it's a corporate governance statute rather than an insurance mandate.⁶ The practical implication is direct: for a planned community, the coverage analysis starts and ends with the declaration and any lender requirements.

2C. Fidelity, D&O, and the federal overlay that often sets the floor

Fidelity (crime) and D&O coverage carry no statutory mandate in Indiana. The Condominium Act treats officers' and directors' liability policies as optional coverage that "may" be obtained if the condominium instruments require it, and the Nonprofit Corporation Act only permits a corporation to purchase such insurance.^1,6 In practice, these coverages run declaration-driven or lender-driven. The federal and secondary-market overlay stands as a distinct layer of lender and federal requirements, not Indiana statute. Fannie Mae's Selling Guide requires fidelity/crime coverage for most condominium projects, excepting projects of 20 units or fewer and projects that would need coverage of $5,000 or less, and it accepts a state's statutory fidelity requirement in place of its own where one exists — Indiana sets none — while requiring master property coverage at replacement cost.^4,12 Freddie Mac's Single-Family Seller/Servicer Guide imposes parallel condominium-project requirements.¹⁰ FHA condominium project approval requires the master hazard policy to fully cover the insurable replacement cost of all units and insurable common elements, comprehensive liability coverage of at least $1 million per occurrence, and, for projects with more than 20 units, fidelity coverage of at least the greater of three months of aggregate assessments plus reserve funds or the minimum required by state law, plus flood coverage where units or common elements sit in a Special Flood Hazard Area.⁵ The National Flood Insurance Program, through the Flood Disaster Protection Act, makes flood coverage mandatory for a federally backed mortgage on property in a Special Flood Hazard Area.¹¹ Because the Act offers so little, this lender/federal layer frequently sets the binding coverage floor for financed condominiums, driving fidelity coverage, master property adequacy, and flood coverage decisions, and it reaches planned communities too, which have no statutory floor at all.^4,5,11 Indiana's real coverage decisions get shaped by market factors, not mandates: severe convective storms — wind, hail, tornadoes — winter perils — snow load, ice, frozen pipes — and riverine or urban flooding along the Ohio and interior rivers that brings NFIP into play. The state carries no coastal windstorm exposure.¹³

Section 3 — Coverage allocation and compliance obligations

A. Association coverage obligations

For condominiums, the Act requires the association to carry a master casualty policy on the common-area improvements at full replacement value and a master liability policy in an amount fixed by the governing documents; the master deed and declaration typically expand on what property the master policy reaches.¹ This applies to condominiums under the Act. For planned communities, the declaration typically requires the association to insure commonly owned property and carry liability coverage, but no statutory floor exists; the obligation runs contractual under the CC&Rs.³

B. Coverage allocation between association and owners

The error readers make most often: assuming the master policy covers the unit interior or owner improvements. Under the Indiana Act the master casualty policy reaches the common areas and the improvements comprising them, not unit interiors, betterments, or personal property, unless the declaration provides otherwise.¹ Owners typically fill that gap with an individual unit-owner policy — an HO-6 — which covers interior improvements, betterments, and personal property, and can include loss-assessment coverage. For condominiums this allocation comes set by the Act read together with the master deed; for planned communities it runs entirely contractual under the CC&Rs.^1,3

C. Deductibles, proceeds, and repair-or-replace

The Act stays silent on who bears the master-policy deductible, so allocation runs contractual via the declaration; no uniform-act deductible-allocation rule exists in Indiana.¹ On proceeds, the Act runs specific. After a casualty short of complete destruction, the improvements "shall be reconstructed" and the insurance proceeds "shall be applied to reconstruct the improvements."⁷ If the improvements are uninsured or proceeds fall short, the co-owners contribute the balance pro rata by undivided interest, assessed as a common expense and secured by a lien.⁸ After complete destruction, proceeds get divided by undivided interest or unit value unless two-thirds of co-owners vote to rebuild.^7,9 This owner loss-assessment exposure for uninsured or underinsured amounts stands as a condominium feature under the Act; planned-community owners face analogous exposure only as their declaration provides.^8,3

D. Fidelity, D&O, and disclosure

Fidelity and D&O coverage stay declaration-driven or lender-driven rather than statutory, for both condominiums and planned communities.^1,6,4,5 On disclosure, the Condominium Act requires the association to give each co-owner and affected mortgagee written notice when an insurance policy is obtained, changed, or terminated — a statutory obligation for condominiums.¹ Broader production of the master policy or a certificate to purchasers and lenders is generally contractual (via the declaration) or driven by lender and secondary-market review at resale or refinance, not by an Indiana insurance statute.^4,10,5

Section 4 — Recent legislative and judicial activity

A. Recent bills

No bill in the 2025 or 2026 Indiana legislative sessions amended the Condominium Act's insurance sections — Ind. Code §§ 32-25-8-9 through -12 — or otherwise specifically addressed association insurance obligations.^1,14 The 2026 community-association bills, for example House Bill 1152 on homeowners association matters, plus measures on records, quorum, and voting, addressed governance, fees, and property-use questions, not insurance coverage, deductibles, or proceeds.¹⁴ There's accordingly no insurance-specific bill to report in the window.

B. Recent appellate rulings

C. Active legislative debates

No active Indiana proposal would modernize the condominium statute's insurance provisions or add a planned-community insurance mandate; recent legislative pressure on associations has centered on governance and fees, while the more material pressure runs market-driven, tied to convective-storm claim costs and property-insurance availability.^13,14

Section 5 — National positioning and related coverage

Association insurance regulation falls into three broad categories. First are condominium-statute states built on the UCA/UCIOA model, which impose a detailed statutory condominium insurance mandate keyed to Section 3-113. Second are comprehensive non-uniform prescriptive states, notably Florida (Chapter 718, with structural-inspection and reserve requirements) and California (Davis-Stirling). Third are CC&R-primary and traditional-statute states such as Alabama, Arkansas, and Mississippi, where planned communities carry no statutory insurance mandate and condominiums answer to a traditional horizontal property act thin on insurance. Indiana sits at the lighter-touch end: a traditional condominium statute rather than a modern uniform act, and no planned-community statute imposing insurance.^1,2,3 For a multi-state operator entering Indiana, the practical implication is that condominium coverage is driven by the master deed and lender requirements more than by the statute, and planned-community coverage runs entirely declaration-driven. Indiana hasn't moved to modernize its condominium insurance provisions or to enact a comprehensive planned-community insurance statute.¹⁴

HOA Weekly updates its Indiana Insurance Requirements coverage quarterly, tracking the legislature, the Indiana Supreme Court, and shifts in the property-insurance market. Federal frameworks — Fannie Mae, Freddie Mac, FHA, NFIP, and FHA fair-housing accommodation rules — apply to Indiana associations regardless of the state framework, and a fuller treatment of those rules will follow once that coverage is built out.

1. Ind. Code § 32-25-8-9, "Insurance; co-owners" (2024), Indiana Condominium Act, Ind. Code § 32-25 (official code at iga.in.gov/laws/2025/ic/titles/32) ↩
2. Ind. Code § 32-25, Indiana Condominiums Act (traditional horizontal property act), Indiana Code, iga.in.gov ↩
3. Ind. Code § 32-25.5, Homeowners Associations (budgets, records, governance; no insurance scheme), Indiana Code, iga.in.gov ↩
4. Fannie Mae Selling Guide B7-4-02, Fidelity/Crime Insurance Requirements for Project Developments (lender/secondary-market requirement, not Indiana statute) ↩
5. FHA Condominium Project Approval, HUD Handbook 4000.1 (hazard, liability, fidelity, flood insurance conditions; federal requirement, not Indiana statute) ↩
6. Ind. Code § 23-17-16 (Nonprofit Corporations; Indemnification; permissive purchase of insurance), Indiana Code, iga.in.gov/laws/current/ic/titles/23 ↩
7. Ind. Code § 32-25-8-10, "Insurance; reconstruction of building" (official code at iga.in.gov/laws/2025/ic/titles/32) ↩
8. Ind. Code § 32-25-8-11, "Insurance; reconstruction of building; insufficient proceeds" (official code at iga.in.gov/laws/2025/ic/titles/32) ↩
9. Ind. Code § 32-25-8-12, "Determination not to rebuild after casualty or disaster," Indiana Code, iga.in.gov ↩
10. Freddie Mac Single-Family Seller/Servicer Guide, Chapter 5701 (Condominiums) (lender/secondary-market requirement, not Indiana statute) ↩
11. NFIP mandatory purchase requirement, Flood Disaster Protection Act of 1973 (42 U.S.C. § 4012a), FEMA (federal requirement, not Indiana statute) ↩
12. Fannie Mae Selling Guide B7-4, Liability and Fidelity/Crime Insurance Requirements for Project Developments (lender requirement) ↩
13. Community Associations Institute, 2026 Indiana End of Legislative Session Report (market-driven insurance pressure; governance-focused legislation) ↩
14. House Bill 1152 (2026), "Homeowners association matters," Indiana General Assembly, iga.in.gov (governance/fees, not insurance) ↩
15. Property-Owners Ins. Co. v. Wildwood Court of Munster Condo. Ass'n, No. 23A-PL-2873, 2024 WL 4579429 (Ind. Ct. App. Oct. 25, 2024) (memorandum decision; verify via public.courts.in.gov or MyCase by case number) ↩