North Dakota HOA Insurance Requirements

Section 1: Overview — How HOA insurance is regulated in North Dakota

North Dakota regulates condominium insurance through a traditional horizontal property statute that is nearly silent on insurance, and imposes no statutory insurance mandate on planned communities, which rely entirely on their recorded declarations.³ Condominiums are governed by the North Dakota Condominium Ownership Act, N.D.C.C. ch. 47-04.1, a traditional horizontal property regime statute rather than a modern uniform act; it doesn't descend from the 1980 Uniform Condominium Act or the 1982 Uniform Common Interest Ownership Act.³ The Act contains no dedicated insurance section, and its only insurance references are indirect, so the master deed, declaration, and bylaws carry the operational detail for condominium insurance.¹ Non-condominium planned communities have no dedicated statute and no statutory insurance mandate; their coverage is set by recorded covenants, conditions, and restrictions, with corporate scaffolding supplied by the North Dakota Nonprofit Corporation Act, N.D.C.C. ch. 10-33, where the association is incorporated.² Fidelity (crime) and directors-and-officers (D&O) coverage aren't statutory mandates in North Dakota and are typically driven by the declaration or by lender requirements.⁷ Because the statute provides so little, lender and federal requirements, chiefly Fannie Mae, Freddie Mac, FHA, and the National Flood Insurance Program, frequently set the effective coverage floor for financed condominiums.⁹ Within the national framework, North Dakota sits at the lighter-touch end: a CC&R-primary state for planned communities and a traditional-statute state for condominiums, distinct from UCA and UCIOA condominium-mandate states and from comprehensive prescriptive states such as Florida and California. The sections that follow set out the statutory framework, the coverage-allocation map, and recent activity.

Section 2: The statutory insurance framework

2A. The North Dakota Condominium Ownership Act and its insurance treatment

The North Dakota Condominium Ownership Act, N.D.C.C. ch. 47-04.1, governs condominiums created by recording a declaration in the county recorder's office.³ The chapter contains 16 sections and is a traditional horizontal property statute, not the 1980 Uniform Condominium Act or the 1982 UCIOA.³ That distinction is the defining feature of insurance regulation for North Dakota condominiums. A modern uniform act would contain a detailed insurance section (Section 3-113) with a replacement-cost valuation mandate, a commercial general liability requirement, a "reasonably available" qualifier, an improvements-and-betterments exclusion, and a structured deductible, proceeds, and repair-or-replace scheme. The North Dakota Act contains none of this machinery.

The Act doesn't require the association to carry any specified property, liability, fidelity, or flood coverage. Its only direct insurance references are indirect and narrow. Section 47-04.1-07 requires that the bylaws provide for "disposition of hazard insurance proceeds," which presupposes that some hazard coverage exists but doesn't itself mandate that coverage, set a valuation basis, or define its scope.¹ That section also bars bylaws from conditioning the payment of losses or the disposition of hazard proceeds on whether a unit's occupant is an owner or a tenant.¹ Separately, the 2023 electric-vehicle-charging provision, Section 47-04.1-16, requires a unit owner installing a charging station in a limited common area to name the association as an additional insured and to maintain a liability policy, which is an owner-side obligation rather than an association coverage mandate.¹⁰

The Act shouldn't be described as containing the UCA Section 3-113 replacement-cost mandate, the commercial general liability mandate, the reasonably-available qualifier, the improvements-and-betterments exclusion, or the modern deductible-allocation scheme. None of these appear in the text. Because the statute is this thin, the recorded master deed, declaration, and bylaws carry the operational detail for condominium insurance in North Dakota, and the practical rulebook for any given condominium is the master deed read against the limited requirements of the Act.

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

Non-condominium planned-community HOAs in North Dakota have no dedicated statute and therefore no statutory insurance mandate. Their insurance is set entirely by the recorded declaration and bylaws.² There's no stand-alone North Dakota HOA act; planned communities operate under their recorded covenants and, where incorporated, under corporate law.

The order of precedence differs by community type. For condominiums, the analysis runs from the Act — to the limited extent it speaks to insurance — then the recorded master deed or declaration, then the bylaws, then the rules. For planned communities, the declaration is the primary source and there's no overriding insurance statute to consult.

Where an association is incorporated as a nonprofit, the North Dakota Nonprofit Corporation Act, N.D.C.C. ch. 10-33, supplies corporate-formality scaffolding for director conduct and indemnification, distinct from any insurance requirement.² Section 10-33-84 permits a corporation to purchase and maintain insurance on behalf of a person in an official capacity and addresses mandatory and permissive indemnification of directors and officers, but it doesn't require the association to carry any insurance.⁷ The practical implication is direct: for a planned community, the coverage analysis begins and ends with the declaration and any applicable lender requirements.

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

Fidelity (crime) insurance and D&O liability insurance aren't statutory mandates in North Dakota. Neither the Condominium Ownership Act nor the Nonprofit Corporation Act requires them; where they exist, they're driven by the declaration or by lender requirements.⁷

Because the state statute provides so little, the federal and secondary-market overlay frequently sets the binding coverage floor for financed North Dakota condominiums. These are lender or federal requirements, not North Dakota statute. Fannie Mae's Selling Guide requires that a project property insurance policy provide for claims to be settled on a replacement cost basis and states that policies settling claims on an actual cash value basis aren't acceptable.⁹ Fannie Mae also requires fidelity/crime insurance for all condo and co-op projects, subject to limited exceptions that include projects of 20 units or fewer and projects that would need coverage of $5,000 or less.⁶ That fidelity guideline is a lender guideline, not North Dakota law. FHA project approval separately conditions eligibility on adequate master hazard insurance, comprehensive liability coverage of at least $1 million for any occurrence, fidelity coverage for all condominium projects with more than 20 units, and flood coverage where any building sits in a Special Flood Hazard Area.⁵ Under FHA's Single Family Handbook 4000.1, the required fidelity amount is the greater of three months of aggregate assessments on all units plus reserve funds (up to the maximum permitted by state law) or the minimum required by state law.⁵ FHA flood coverage for units in a Special Flood Hazard Area must equal the replacement cost of the covered improvements or the National Flood Insurance Program maximum per unit multiplied by the number of units, whichever is less.¹¹ This layer applies to planned communities as well, which have no statutory floor at all.

North Dakota market conditions shape real coverage decisions independent of any mandate. The dominant property exposures are severe winter perils, including snow load and frozen and burst pipes, and severe convective storms bringing hail and wind, along with riverine flooding, notably along the Red River of the North. North Dakota has no coastal windstorm exposure. These factors affect availability and cost but aren't statutory HOA requirements.

Section 3: Coverage allocation and compliance obligations

A. Association coverage obligations

For condominiums, the North Dakota Condominium Ownership Act doesn't require the association to carry any specified coverage; it presupposes hazard coverage only by requiring the bylaws to address disposition of hazard insurance proceeds — condominiums, and only indirectly.¹ In practice the master deed and bylaws obligate the association to insure the building and common elements, so the operative source is contractual, not statutory — condominiums, via the master deed.¹ For planned communities, any obligation to insure common area is contractual through the CC&Rs, and there's no statutory floor — planned communities, contractual.²

B. Coverage allocation between association and owners

The most common reader error is assuming the master policy covers the unit interior and owner improvements. Under the Act's default, the unit boundary is the interior surfaces of the perimeter walls, floors, ceilings, windows, and doors, so structural and common elements fall outside the unit; the master deed defines what the master policy actually covers — condominiums, statutory default plus master deed.⁴ Individual owners are typically responsible for the unit interior, improvements and betterments, and personal property, which an individual unit owner (HO-6) policy addresses; this allocation is set by the declaration, not by statute — condominiums and planned communities, contractual.¹ Loss-assessment coverage on an owner's individual policy backstops the owner's share of a common assessment for a covered loss, in both community types, contractual.⁵

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

No North Dakota statute allocates the master-policy deductible; allocation is set by the declaration and bylaws, and no UCIOA-style owner-charge rule applies — condominiums and planned communities, contractual.¹ The Act requires the bylaws to govern disposition of hazard insurance proceeds, and it addresses casualty indirectly: if a materially damaged project isn't substantially rebuilt within three years, or if owners holding more than 50 percent of the common-area interest oppose restoration, a unit owner may seek partition by sale — condominiums, statutory.⁸ The North Dakota Supreme Court has held that where condominium documents required the developer, as de facto board, to apply hazard proceeds to repair, the association was entitled to those proceeds, underscoring that the recorded documents, not the statute, control the proceeds question — condominiums, case law.¹² Owner exposure to a common-expense assessment for uninsured amounts is governed by the declaration, in both community types, contractual.¹

D. Fidelity, D&O, and disclosure

Fidelity and D&O coverage are declaration-driven or lender-driven, not statutory, in both community types.⁷ The Condominium Ownership Act requires bylaws, rules, and regulations to be reduced to writing and made available to every owner, and requires the bylaws to be recorded with the declaration, which makes the insurance-related bylaw provisions accessible to owners, purchasers, and lenders — condominiums, statutory.¹ For incorporated associations, the Nonprofit Corporation Act separately requires that corporate records be kept and made available for inspection by members and directors, in both community types where incorporated, corporate.²

Section 4: Recent legislative and judicial activity

North Dakota's small HOA market and biennial legislative sessions mean insurance-specific activity is sparse. The most material recent pressure is market-driven rather than statutory.

A. Recent bills

B. Recent appellate rulings

No North Dakota Supreme Court opinion decided between July 2023 and July 2026 squarely addresses condominium or planned-community association insurance obligations, coverage allocation, deductible disputes, or proceeds-and-rebuild questions. The leading on-point authority remains First International Bank & Trust v. Peterson, which predates the 36-month window and is discussed in Section 3C as background rather than as recent activity.¹²

C. Active legislative debates

The most active pressure on North Dakota association insurance is market availability and cost rather than legislation. In July 2025 Blaine Bergstedt, Director of the North Dakota Insurance Department's Property and Casualty Division, told Prairie Public that "companies that have multiple condos on their book of business are tightening up their underwriting requirements" and that "a few companies have decided to opt out of writing condo insurance," suggesting associations shop through independent agents, consider higher deductibles, and review their bylaws to make risk allocation more favorable to carriers.¹⁴ Because the Legislative Assembly meets biennially and didn't enact the 2025 common-interest-community proposal, any statutory response would not arrive before the next regular session.

Section 5: National positioning and related coverage

North Dakota sits at the lighter-touch end of three broad categories of association insurance regulation. The first category is condominium-statute states on the UCA or UCIOA model that impose a detailed statutory condominium insurance mandate keyed to Section 3-113, with replacement-cost valuation, a liability mandate, and a deductible-allocation scheme. The second is comprehensive non-uniform prescriptive states, notably Florida (Chapter 718, with structural-inspection and reserve requirements) and California (Davis-Stirling). The third is CC&R-primary and traditional-statute states such as Alabama, Arkansas, and Mississippi, where planned communities carry no statutory insurance mandate and condominiums are governed by a traditional horizontal property act thin on insurance. North Dakota falls in this third group and near its lightest edge: a traditional condominium statute rather than a modern uniform act, no planned-community insurance statute, and no permanent intermediate appellate court, since civil appeals run from the district courts directly to the North Dakota Supreme Court.¹⁵ For a multi-state operator entering North Dakota, condominium coverage is driven by the master deed and lender requirements more than by the statute, and planned-community coverage is entirely declaration-driven. North Dakota hasn't moved to modernize its condominium statute or to enact a comprehensive planned-community insurance statute; the 2025 proposal to create a common-interest-community chapter failed.¹³

HOA Weekly updates its North Dakota Insurance Requirements coverage quarterly as the Legislative Assembly and the North Dakota 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 North Dakota associations regardless of the state framework, with fuller treatment to follow once that coverage is built out.

1. N.D.C.C. § 47-04.1-07, Administration – Bylaws – Rules and regulations ↩
2. N.D.C.C. ch. 10-33, Nonprofit Corporations (North Dakota Century Code) ↩
3. N.D.C.C. ch. 47-04.1, Condominium Ownership of Real Property (North Dakota Century Code) ↩
4. N.D.C.C. § 47-04.1-06, Incidents of a condominium grant (unit boundaries) ↩
5. FHA Condominium Project Approval and Processing Guide (HUD), Insurance Requirements ($1 million liability per occurrence; fidelity for projects over 20 units; three months assessments plus reserves) ↩
6. Fannie Mae Selling Guide B7-4-02, Fidelity/Crime Insurance Requirements for Project Developments (required for all projects, with exceptions for 20 units or fewer or coverage of $5,000 or less) ↩
7. N.D.C.C. § 10-33-84, Indemnification (permits, does not require, insurance for directors and officers) ↩
8. N.D.C.C. § 47-04.1-09, Partition not available – Exceptions ↩
9. Fannie Mae Selling Guide B7-3-03, Master Property Insurance Requirements for Project Developments (replacement cost basis) ↩
10. N.D.C.C. § 47-04.1-16, Electric vehicle charging station installation – Penalty ↩
11. FHA Condominium Project Approval Required Documentation, Flood Insurance and Special Flood Hazard Areas (HUD) ↩
12. First International Bank & Trust v. Peterson, 2011 ND 87, 797 N.W.2d 316 (N.D. 2011) ↩
13. SB 2394, 69th Legislative Assembly (2025), Association community bylaws and board of directors (failed on second reading, 0-46, Feb. 24, 2025) ↩
14. Prairie Public, "Some North Dakota condominium associations say they're having trouble finding insurance" (July 7, 2025), quoting Blaine Bergstedt, ND Insurance Department Property and Casualty Division Director ↩
15. North Dakota Court System, Guide to an Appeal to the North Dakota Supreme Court (district court to Supreme Court directly) ↩