Maryland HOA Insurance Requirements

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

Maryland imposes a prescriptive statutory insurance mandate on condominiums through Md. Code, Real Property § 11-114, including a distinctive allocation of the master-policy deductible to a unit owner, while planned developments governed by the Maryland Homeowners Association Act stay declaration-driven on property insurance.¹³ Section 11-114 requires the council of unit owners to maintain property insurance on the common elements and units and comprehensive general liability insurance, and it fixes how the deductible, insurance proceeds, and reconstruction get handled.¹ The Homeowners Association Act, Title 11B, works as a disclosure and governance statute; it doesn't impose a § 11-114-style property-insurance mandate, so planned-development coverage runs off the recorded declaration.³ The distinctive owner-deductible cap is a specific dollar figure that's been adjusted over time — currently $10,000, rising to $25,000 on October 1, 2027 — and should get verified against the current statute rather than assumed.¹⁵ Fidelity coverage carries a statutory mandate for condominiums under § 11-114.1, but Maryland doesn't statutorily mandate directors-and-officers coverage, which runs declaration-driven or lender-driven.²⁴ Maryland renamed its appellate courts effective December 14, 2022 — the Appellate Court of Maryland and the Supreme Court of Maryland — and the state carries Atlantic and Chesapeake coastal exposure that shapes the coverage market.⁸ Maryland belongs among the comprehensive prescriptive condominium states, apart from the UCA/UCIOA states and the states where recorded covenants serve as the primary insurance rulebook. The sections ahead map the statute, how coverage gets allocated, and what's happened recently.

Section 2: The statutory insurance framework

2A. The Condominium Act insurance section (§ 11-114) and the owner-deductible rule

Section 11-114 requires the council of unit owners, no later than the first sale of a unit to someone other than the developer, to maintain, to the extent reasonably available, property insurance against risks of direct physical loss commonly insured against, in amounts the council determines but never below any amounts the declaration or bylaws specify, and comprehensive general liability insurance including medical payments insurance.¹ The statute doesn't name a replacement-cost standard; the coverage amount gets set by the council subject to the declaration or bylaw floor.¹ Property coverage reaches the common elements and units, excluding improvements and betterments installed by unit owners other than the developer; for a condominium composed entirely of similar detached units, the mandate reaches the common elements only.¹ The distinctive Maryland rule sits in § 11-114(g)(2): if damage originates from a unit, the owner of that unit bears the council's property-insurance deductible up to $10,000, and any amount above the cap becomes a common expense; if damage originates from the common elements or an event outside the units and common elements, the deductible counts as a common expense.¹ The council must inform each unit owner annually, in writing, of the owner's deductible responsibility and the amount of the deductible, and it may assess the responsible owner annually.¹ Insurance proceeds go to an insurance trustee or the council, never to a mortgagee, and sit in trust and get disbursed first for repair or restoration.¹ The council must repair or replace promptly unless the condominium terminates, repair would be illegal, or 80 percent of unit owners vote against rebuilding.¹ The maintenance duty, the deductible allocation, the proceeds-in-trust rule, and the reconstruction obligation stay statutory; the declaration and bylaws may set higher amounts and require additional coverage but can't drop below the statutory floor.¹

2B. The Homeowners Association Act and planned developments

Title 11B, the Maryland Homeowners Association Act, works principally as a disclosure and governance statute. It governs initial-sale and resale disclosures, books and records, meetings, and dispute resolution, and it holds no § 11-114-style comprehensive property-insurance mandate for planned developments.³ Planned-development property insurance therefore runs declaration-driven: the recorded declaration and bylaws determine what the association must insure, whether common areas and structures get covered, and what lot owners insure themselves. Title 11B does impose a fidelity-insurance requirement on homeowners associations under § 11B-111.6, paralleling the condominium fidelity standard, but that's a crime-coverage rule, not a property mandate.³ The threshold analytical step is classification: determine whether a community is a condominium — governed by § 11-114 plus its declaration — or a planned development — governed by Title 11B plus its declaration — before analyzing any insurance obligation, because the source of the obligation differs entirely between the two.

2C. The declaration, corporate law, and the federal and market overlay

The recorded declaration interacts with § 11-114 by setting minimum coverage amounts and authorizing additional coverage, and § 11-114(b) expressly lets the declaration or bylaws require other insurance the council must carry.¹ Fidelity coverage carries a statutory mandate under § 11-114.1, set at least at the lesser of three months of gross annual assessments plus the total held in all investment accounts, or $3,000,000, with an exemption for condominiums of four or fewer units where three months of gross assessments runs less than $2,500.² Directors-and-officers coverage isn't statutorily mandated; the Maryland Corporations and Associations Code permits a corporation to indemnify directors and officers under § 2-418 and, under § 2-418(k), permits it to purchase D&O insurance, but doesn't require the coverage, so D&O stays declaration-driven or lender-driven.⁴ The Fannie Mae fidelity guideline is a lender requirement, not Maryland law. A distinct federal and secondary-market layer applies regardless of state law: Fannie Mae Selling Guide and Freddie Mac Seller/Servicer Guide project-insurance requirements, FHA condominium project-approval conditions, and NFIP flood requirements bind associations whose units are financed conventionally or through FHA.⁶ NFIP coverage, principally the Residential Condominium Building Association Policy, runs central in Special Flood Hazard Areas along the Atlantic coast — Ocean City and the coastal bays — and the Chesapeake, where windstorm and storm-surge exposure drive named-storm and hurricane percentage deductibles.⁷ These market and NFIP realities stay distinct from statutory HOA mandates.

Section 3: Coverage allocation and compliance obligations

A. Association coverage obligations

For condominiums, § 11-114 requires the council of unit owners to maintain property insurance on the common elements and units — excluding owner-installed improvements and betterments — and comprehensive general liability insurance including medical payments, a statutory mandate for condominiums.¹ The council must also carry fidelity insurance under § 11-114.1, a statutory mandate for condominiums.² For planned developments, the recorded declaration typically requires the association to insure common areas and structures it owns or maintains; no statutory property-insurance floor exists under Title 11B, so the obligation runs declaration-driven for planned developments.³

B. Coverage allocation between association and owners

Under § 11-114, the master property policy covers the common elements and units as originally built, and each unit owner counts as an insured person under the policy for property and casualty losses to that scope; the policy waives subrogation against unit owners and sits primary over an owner's own coverage — a statutory mandate for condominiums.¹ Improvements and betterments installed by unit owners, and personal property, stay the owner's responsibility, typically insured through a unit-owner policy — an HO-6 — with loss-assessment coverage: declaration-driven and market practice for condominiums.¹ An owner of a residential detached unit in a condominium composed entirely of similar detached units must carry homeowners insurance on the entirety of the unit unless the council elects to carry it — a statutory allocation for condominiums.¹ Effective October 1, 2027, Chapter 717 of 2026 adds a mandatory unit-owner policy under new § 11-114.3 for residential condominiums other than those composed entirely of detached units, requiring, among other terms, personal liability coverage of at least $500,000, loss-assessment coverage of at least $25,000, loss-of-use coverage sufficient for at least 12 months of alternate housing, and dwelling coverage of at least the greater of $25,000 or the amount necessary to repair and replace owner improvements — a statutory mandate for condominiums, effective 2027.⁵⁹

C. Deductibles, proceeds, and reconstruction

Where damage originates from a unit, the owner bears the council's property-insurance deductible up to $10,000; effective October 1, 2027 under Chapter 717 of 2026, § 11-114(g)(2)(iii) makes the owner responsible for the least of the total cost of repair or replacement, the amount of the council's property-insurance deductible as specified in the policy, or $25,000 — a statutory mandate for condominiums.¹⁵ Proceeds sit in trust and get disbursed first for repair or restoration, the deductible doesn't count as a cost of repair in excess of proceeds, and repair cost above proceeds and reserves becomes a common expense — a statutory mandate for condominiums.¹ The council must rebuild promptly subject to the termination, illegality, and 80-percent-vote exceptions — a statutory mandate for condominiums.¹

D. Fidelity, D&O, and disclosure

Fidelity coverage runs required by statute for condominiums under § 11-114.1 and for homeowners associations under § 11B-111.6 — a statutory mandate.²³ D&O coverage isn't statutorily mandated; § 2-418 permits indemnification and, under § 2-418(k), permits purchase of D&O insurance — permissive corporate authority.⁴ The council must maintain and make available for inspection copies of all insurance policies it carries, and its insurer must issue certificates or memoranda of insurance to the council and, on request, to any unit owner, mortgagee, or beneficiary — a statutory disclosure duty for condominiums.¹ Title 11B requires planned-development disclosures at initial sale and resale, which in practice surface the association's insurance arrangements to purchasers — a statutory disclosure duty for planned developments.³

Section 4: Recent legislative and judicial activity

A. Recent bills

B. Recent appellate rulings

No published decision of the Appellate Court of Maryland or the Supreme Court of Maryland within the past 36 months squarely addressing condominium insurance obligations, the owner-deductible allocation, or proceeds and rebuild questions was located. The controlling appellate authority remains Anderson v. Council of Unit Owners of the Gables on Tuckerman Condominium, 404 Md. 560, 948 A.2d 11 (2008), from the former Court of Appeals — now the Supreme Court of Maryland.

C. Active legislative debates

The 2026 enactment of Chapter 717 followed 2025 proposals — Senate Bill 446 and House Bill 449 — to raise the owner-deductible cap to $25,000, and further adjustment to the Condominium Act insurance provisions remains an active subject as deductibles rise.⁵ The most material recent pressure on coverage runs market-driven, principally coastal and Chesapeake windstorm and flood cost.

Section 5: National positioning and related coverage

Maryland sits among the comprehensive prescriptive states with detailed statutory condominium insurance regimes, alongside Florida (Chapter 718) and California (Davis-Stirling), rather than the UCA or UCIOA condominium-mandate states keyed to Section 3-113 or the states where recorded covenants serve as the primary insurance rulebook, such as Alabama and Arkansas.¹ Maryland's distinctive features run to the statutory owner-deductible cap in § 11-114(g)(2), a fidelity mandate for both condominiums and homeowners associations, a disclosure-oriented Homeowners Association Act for planned developments, and the 2022 renaming of its appellate courts.²⁸ For a multi-state operator entering Maryland, the practical implications are that the § 11-114 owner-deductible allocation must get applied correctly, planned developments run declaration-driven, and Atlantic and Chesapeake exposure stands as a market constraint specific to this state. Current legislative momentum runs toward higher owner responsibility and a mandatory unit-owner policy, reflected in Chapter 717 of 2026.⁵

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

1. Md. Code, Real Property § 11-114 (Required insurance coverage; reconstruction), Maryland General Assembly statute text ↩
2. Md. Code, Real Property § 11-114.1 (Fidelity insurance), Maryland General Assembly statute text ↩
3. Md. Code, Real Property Title 11B (Maryland Homeowners Association Act), § 11B-106 disclosure provisions, Maryland General Assembly statute text ↩
4. Md. Code, Corporations & Associations § 2-418 (Indemnification of directors, officers, employees, and agents; § 2-418(k) authorizing purchase of insurance), Maryland General Assembly statute text ↩
5. Maryland General Assembly, Senate Bill 747 (2026), Chapter 717, bill details ↩
6. Fannie Mae Selling Guide B7-3-03, Master Property Insurance Requirements for Project Developments ↩
7. FEMA National Flood Insurance Program, Residential Condominium Building Association Policy (Standard Flood Insurance Policy form) ↩
8. Maryland Judiciary, "Voter-approved constitutional change renames high courts to Supreme and Appellate Court of Maryland" (Dec. 14, 2022) ↩
9. Maryland General Assembly, Chapter 717 (SB 747, 2026), enrolled chapter text (new § 11-114.3 unit-owner policy terms) ↩
10. Maryland General Assembly, House Bill 1227 (2024), Chapter 296, bill details ↩
11. Anderson v. Council of Unit Owners of the Gables on Tuckerman Condominium, 404 Md. 560, 948 A.2d 11 (2008), Maryland Reports (Maryland Judiciary opinions archive) ↩