Nebraska HOA Insurance Requirements

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

Nebraska imposes a statutory association insurance mandate on condominiums through the Nebraska Condominium Act, but non-condominium planned communities have no comprehensive statutory insurance mandate and rely on the recorded declaration. The condominium insurance requirement sits at Neb. Rev. Stat. § 76-871 ("Insurance; requirements"), within the Nebraska Condominium Act at Neb. Rev. Stat. §§ 76-825 to 76-894.¹ That mandate applies to condominiums created on or after January 1, 1984, and reaches certain events at older condominiums.⁵

Non-condominium planned-community associations have no dedicated Nebraska statute and therefore no statutory insurance mandate; their coverage obligations come from the recorded covenants, conditions, and restrictions, with corporate-formality scaffolding from the Nebraska Nonprofit Corporation Act (Neb. Rev. Stat. § 21-1901 et seq.) where the association is incorporated.⁶ The condominium provision descends from Section 3-113 of the 1980 Uniform Condominium Act, not the 1982 Uniform Common Interest Ownership Act, and it conditions the property and liability mandate on coverage being "reasonably available," with a duty to notify owners if required coverage becomes unavailable.¹

Fidelity (crime) coverage and directors-and-officers (D&O) liability coverage aren't statutory mandates in Nebraska; they're typically driven by the declaration or by secondary-market lender requirements.¹ Within the national picture, Nebraska is a 1980-UCA condominium-mandate state whose planned-community insurance treatment resembles the CC&R-primary states such as Alabama and Arkansas. The sections below detail the statutory framework, the coverage allocation between association and owners, recent activity, and where Nebraska sits nationally.

Section 2: The statutory insurance framework

2A. The condominium insurance mandate

The operative provision is Neb. Rev. Stat. § 76-871, enacted as part of the 1983 recodification of Nebraska condominium law (Laws 1983, LB 433, § 47).¹ It descends from Section 3-113 of the 1980 Uniform Condominium Act. That lineage matters: it's distinct from Section 3-113 of the 1982 Uniform Common Interest Ownership Act adopted by Alaska, Colorado, and other UCIOA states, and Nebraska did not adopt UCIOA for condominiums. Features unique to later UCIOA drafts, including the 2008 authority to charge a deductible to an owner who is the source of a loss, are absent from the Nebraska text.¹

Section 76-871 requires two coverages, each "to the extent reasonably available." First, property insurance on the property including the common elements, insuring against all risks of direct physical loss commonly insured against — or, for a conversion building, fire and extended coverage perils. Second, liability insurance, including medical payments insurance, in an amount set by the executive board but not less than any amount specified in the declaration, covering death, bodily injury, and property damage arising out of the use, ownership, or maintenance of the common elements. The statute sets no fixed dollar minimum for liability coverage.¹

The "reasonably available" qualifier is real and survives in the Nebraska text. If the required coverage isn't reasonably available, the association must promptly deliver or mail notice of that fact to all unit owners. The mandate is therefore conditional, not absolute.¹

The property valuation standard is the original 1980-UCA formulation, and it isn't a full-replacement-cost command. The total amount of insurance, after application of any deductibles, must be not less than 80 percent of the actual cash value of the insured property at the time the insurance is purchased and at each renewal date, exclusive of land, excavations, foundations, and other items normally excluded from property policies. For a building with units having horizontal boundaries, the property coverage must include the units but need not include improvements and betterments installed by unit owners.¹

On proceeds, any loss covered by the property policy is adjusted with the association, and proceeds are payable to an insurance trustee — or to the association — held in trust for unit owners and lienholders, and disbursed first for repair or restoration. Owners and lienholders receive nothing until the property is completely repaired or the condominium is terminated. On the repair obligation, any insured portion of the condominium that is damaged or destroyed must be repaired or replaced promptly by the association, unless the condominium is terminated, repair would be illegal, or 80 percent of unit owners vote not to rebuild. The cost of repair or replacement in excess of insurance proceeds and reserves is a common expense. On deductibles, the statute contemplates deductibles in setting the 80 percent floor but doesn't authorize the association to charge a deductible back to an owner who caused the loss.¹

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

Non-condominium planned communities in Nebraska have no dedicated statute and no statutory insurance mandate. Their insurance obligations are set entirely by the recorded declaration. Nebraska never enacted a comprehensive common-interest or planned-community act, so there's no statutory floor for property coverage, liability limits, proceeds handling, or rebuild duties in a planned community.⁶

The order of precedence differs by community type. For a condominium, the analysis runs from the Nebraska Condominium Act — to the extent § 76-871 speaks to insurance — then the declaration, then bylaws, then rules. For a planned community, the declaration is the primary source, with no overriding insurance statute above it.²

Where a planned-community association is incorporated, the Nebraska Nonprofit Corporation Act (Neb. Rev. Stat. § 21-1901 et seq.) supplies corporate-governance scaffolding for director conduct and indemnification, but it isn't an insurance mandate. It permits a corporation to indemnify directors and officers and to purchase insurance on their behalf; it doesn't require the association to carry any coverage.³ The practical implication is direct: for a planned community, the coverage analysis begins and ends with the recorded declaration and any applicable lender requirements.

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

For condominiums, the declaration retains substantial power alongside the statute. Section 76-871 may be varied or waived only for a condominium all of whose units are restricted to nonresidential use, but the declaration may require the association to carry additional coverage, and the association may carry any other insurance it considers appropriate.¹ For planned communities, the declaration is the sole source.

Fidelity (crime) insurance and D&O liability insurance aren't statutory mandates in Nebraska. Section 76-871 doesn't require either.¹ In practice, those coverages are driven by the declaration or by lender requirements. The Nebraska Nonprofit Corporation Act permits indemnification and permits purchasing insurance for directors and officers, but it doesn't mandate coverage.³ A claim that Nebraska statute requires fidelity or D&O coverage is incorrect.

The federal and secondary-market overlay sits on top of state law and frequently exceeds it. Fannie Mae and Freddie Mac require the lender or servicer to verify that master property insurance coverage "is at least equal to 100% of the replacement cost value of the project improvements, including common elements and residential structures," settled on a replacement-cost basis.⁴ They cap master-policy deductibles so that "the total amount for such deductibles applicable to a single occurrence must be no greater than 5% of the property insurance coverage amount," and require general liability coverage with a minimum limit of $1,000,000 per occurrence.⁴ Fannie Mae requires fidelity/crime insurance "for all condo and co-op projects" except, among others, projects "consisting of 20 units or less" or those needing fidelity coverage "of $5,000 or less."⁷ FHA condominium project approval imposes parallel conditions, and the National Flood Insurance Program governs coverage in Special Flood Hazard Areas.⁸ These lender and federal requirements apply to Nebraska associations whose units are financed conventionally or through FHA, including planned communities that have no statutory floor, and they, not state statute, usually drive fidelity, flood, and property coverage decisions. The statute's 80 percent actual-cash-value floor is materially below the 100 percent replacement-cost standard those lenders demand.

Nebraska market conditions shape the real coverage decisions. Nebraska is a Great Plains severe-convective-storm state, and hail, straight-line wind, and tornado losses are the dominant property-insurance cost drivers, with wind-and-hail deductibles, roof-specific deductibles, and cosmetic-damage exclusions common in association policies. The March 2019 "bomb cyclone" flooding along the Missouri and Platte rivers, which produced more than $1.3 billion in Nebraska damage — including roughly $449 million to roads, levees, and other infrastructure, $440 million in crop losses, and $400 million in cattle losses — underscored riverine flood exposure and NFIP relevance in Special Flood Hazard Areas.⁸ Nebraska has no coastal windstorm exposure. These are market realities that affect availability and cost, not statutory HOA mandates.

Section 3: Coverage allocation and compliance obligations

A. Association coverage obligations

For condominiums, the master policy must carry property insurance on the property including the common elements — all-risk, or fire and extended coverage for a conversion building — and commercial general liability insurance including medical payments, both "to the extent reasonably available" (Neb. Rev. Stat. § 76-871(a)). Property coverage after deductibles must be not less than 80 percent of actual cash value (§ 76-871(a)(1)).¹ These are statutory obligations for condominiums, mandatory except that they may be varied or waived only for an all-nonresidential condominium (§ 76-871(i)). For planned communities, the same categories are typically required by the recorded declaration, but there's no statutory floor; the obligation is contractual.⁶

B. Coverage allocation between association and owners

For condominiums, the master property policy covers the common elements and, where unit boundaries are horizontal, the units, but need not cover improvements and betterments installed by owners (§ 76-871(b)). The owner is therefore responsible for owner-installed improvements, interior finishes not covered by the master policy, and personal property, typically through an individual HO-6 unit-owner policy. The statute expressly preserves the owner's right to buy separate insurance (§ 76-871(f)), and the association policy is primary where it overlaps owner coverage (§ 76-871(d)(4)).¹ For planned communities, allocation is set by the declaration, not statute. The most common reader error is assuming the master policy covers the unit interior and owner improvements; in a Nebraska condominium it generally doesn't.

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

For condominiums, proceeds are adjusted with the association and held in trust by an insurance trustee or the association, disbursed first to repair or restoration (§ 76-871(e)). The association must repair or replace damaged property promptly, subject to the termination, illegality, and 80-percent-vote exceptions, and any cost above proceeds and reserves is a common expense shared by all owners (§ 76-871(h)).¹ That common-expense treatment is the mechanism by which owners bear a deductible or an uninsured shortfall; the statute doesn't shift a deductible onto a single at-fault owner. The insurer must also waive subrogation against unit owners and household members (§ 76-871(d)(2)). For planned communities, deductible and proceeds handling follow the declaration.

D. Fidelity, D&O, and disclosure

For both condominiums and planned communities, fidelity and D&O coverage are declaration-driven or lender-driven, not statutory.¹ On disclosure, a condominium insurer must issue certificates or memoranda of insurance to the association and, on written request, to any unit owner, mortgagee, or beneficiary, and may not cancel or refuse to renew until 30 days after notice to those parties (§ 76-871(g)).¹ This gives owners, purchasers, and lenders a statutory route to verify condominium coverage. For planned communities, any parallel obligation to furnish policy information is contractual under the declaration.

Section 4: Recent legislative and judicial activity

A. Recent bills

No Nebraska bill enacted or pending in the past 24 months amended or directly affected the condominium association insurance section, Neb. Rev. Stat. § 76-871, or otherwise imposed new association insurance obligations. The statute's source line reads "Laws 1983, LB 433, § 47" only, meaning it has never been amended since original enactment.¹ The most recent Condominium Act revision of any kind was 2020's LB808, which is outside the lookback window and didn't touch § 76-871. LB102 (2024), which appears in the source line of Condominium Act section 76-846, changed land-surveyor and plat provisions, not insurance.⁹ Insurance-adjacent 2025 measures such as LB326 (guaranty association and unfair trade practices) and LB1137 (Insured Homeowners Protection Act, public adjusters) address carrier conduct and individual-homeowner contracts, not condominium or planned-community association coverage obligations.

Status: No qualifying bill. Window searched: July 2024 to July 2026. Last verified: July 18, 2026.

B. Recent appellate rulings

No published opinion of the Nebraska Court of Appeals or the Nebraska Supreme Court in the past 36 months addresses condominium or homeowners association insurance obligations, coverage allocation, deductible disputes, or proceeds and rebuild questions. The window was searched through the Nebraska Judicial Branch opinion libraries and the Nebraska appellate case databases and returned no qualifying case. Older and out-of-scope condominium decisions exist — for example, Twin Towers Condo. Assn. v. Bel Fury Invest. Group, 290 Neb. 329 (2015), on assessment liens, and Dunbar v. Twin Towers Condo. Assn., 26 Neb. App. 354 (2018), on records inspection — but neither is within the window and neither interprets the insurance section.

Status: No qualifying ruling. Window searched: July 2023 to July 2026. Last verified: July 18, 2026.

C. Active legislative debates

Nebraska's unicameral Legislature numbers bills as Legislative Bills (LB) and carries them across the two-year biennium. As of this update, no active proposal specific to condominium or planned-community association insurance is pending; the material recent pressure on Nebraska association insurance is market-driven, through hail-and-wind cost and availability, rather than statutory.

Section 5: National positioning and related coverage

Nebraska occupies a middle position among three broad approaches to association insurance regulation. The first group is condominium-statute states on the UCA or UCIOA model that impose a statutory condominium insurance mandate keyed to Section 3-113; Nebraska sits in this group, on the 1980 UCA version, and only for condominiums. The second group is the comprehensive non-uniform prescriptive states, notably Florida (Chapter 718) and California (Davis-Stirling), which specify coverage and allocation in far greater detail. The third group is the CC&R-primary states, such as Alabama, Arkansas, and Mississippi, where planned communities carry no statutory insurance mandate. On the planned-community question, Nebraska resembles the CC&R-primary states despite having a condominium statute. For a multi-state operator entering Nebraska, the practical points are that condominium obligations track the 1980-UCA Section 3-113 pattern, planned-community coverage is entirely declaration-driven, and hail-and-wind availability is a Nebraska-specific market factor. Nebraska hasn't moved toward a comprehensive planned-community statute, and no such measure is pending.

HOA Weekly updates its Nebraska Insurance Requirements coverage quarterly as the Legislature and the Nebraska Supreme Court act and as the property-insurance market shifts. Federal frameworks, including Fannie Mae, Freddie Mac, FHA, NFIP, and FHA fair-housing accommodation rules, also apply to Nebraska associations regardless of the state framework, with fuller treatment to follow once that coverage is built out.

1. Neb. Rev. Stat. § 76-871, Insurance; requirements (Laws 1983, LB 433, § 47) ↩
2. Neb. Rev. Stat. § 76-825, Nebraska Condominium Act, how cited (§§ 76-825 to 76-894) ↩
3. Neb. Rev. Stat. § 21-1997, Authority to indemnify (see also § 21-19,103, Insurance) ↩
4. Fannie Mae Selling Guide B7-3-03, Master Property Insurance Requirements for Project Developments ↩
5. Neb. Rev. Stat. § 76-826, Sections, applicability ↩
6. Neb. Rev. Stat. § 21-1901, Nebraska Nonprofit Corporation Act, how cited (§§ 21-1901 to 21-19,177) ↩
7. Fannie Mae Selling Guide B7-4-02, Fidelity/Crime Insurance Requirements for Project Developments ↩
8. National Flood Insurance Program, Flood Insurance 101, Nebraska Department of Insurance ↩
9. Neb. Rev. Stat. § 76-846, source line reflecting Laws 2024, LB102, § 9 (plat/plans provisions, not insurance) ↩