Oregon boards can now push $50,000 a unit onto owners
Oregon boards can now push $50,000 a unit onto owners
2026-09-15 · Oregon · Compliance
Two rules that were written independently now fit together in a way that moves up to $50,000 of risk per unit from an Oregon condominium association onto its owners — and the association can do it by board resolution.
The federal half
From July 1, 2026, Freddie Mac and Fannie Mae permit a master property policy to carry a per-unit deductible of up to $50,000:
“If the master property insurance policy includes a per unit deductible, the deductible now may not exceed $50,000 per unit.”1
That replaced the old 5-percent-per-unit cap and retired the geographic limitation on the unit-owner policy cure. The separate per-occurrence rule stands: master policy deductibles for all required perils “may not exceed 5% of the limit maintained for building(s) coverage per occurrence.”
The condition is that the owner insures the gap. An HO-6 unit-owner policy is now mandatory where the master policy includes a per-unit deductible, and its limit “must be at least equal to the greater of: the amount sufficient to repair the Unit to at least its condition prior to the loss; or the amount of the per unit deductible.” The HO-6 deductible “cannot exceed the greater of 5% of the coverage limit or $2,500.”
The Oregon half
ORS 100.435 already permits exactly this structure. An Oregon condominium board may adopt a resolution authorising the association “to obtain and maintain an insurance policy with a deductible amount exceeding the specified maximum,” and may by resolution assign responsibility for paying the deductible either to “A unit owner or the unit owners affected by a loss” or to “All unit owners.” Owners may be required to carry individual policies “for not less than the amount of the deductible.”2
No amendment to the declaration is needed. A resolution does it.
Why a board would do this
Because the alternative may be no master policy at all, or one the association cannot afford. A higher deductible is the most direct lever a board has on master-policy premium, and Oregon's market data shows why boards are reaching for it.
The Division of Financial Regulation's reinsurance study for 2018 to 2024 found that carriers' “Premium increased at a higher rate (205 percent) than coverage purchased (90 percent),” reflected in a “38 percent decrease in coverage per $1,000 of premium,” with the sharpest movement between 2020 and 2021. Seventy-five percent of respondents said obtaining reinsurance was harder or significantly harder in 2024 than in 2018.3
That is upstream cost, not a consumer rate — it should not be quoted as a homeowner premium increase — but it is the pressure that arrives at an association's renewal.
What goes wrong, and who it goes wrong for
The federal rule assumes the owner buys matching coverage. Oregon law does not make that automatic.
An association that adopts a $50,000 per-unit deductible has created a $50,000 uninsured exposure for every owner who does not hold an HO-6 at that limit. Those owners face two consequences at once: they pay the deductible out of pocket after a loss, and their units become unfinanceable, because the lender must verify the unit-owner policy meets the requirement.
Both consequences land on individual owners, not on the association that made the decision. And they land unevenly — on owners who bought long ago and never revisited an HO-6 limit, on owners who paid cash and have no lender prompting them, and on owners for whom a $50,000 increase in required coverage is not affordable.
Servicers begin verifying insurance annually from January 1, 2027, with annual borrower reminders required. That will surface the gap, unit by unit, across a whole building.
The flood interaction nobody is writing about
There is a second trap for an Oregon association in a Special Flood Hazard Area, and it sits in federal statute.
National Flood Insurance Program premium increases are capped at 18 percent a year under 42 U.S.C. §4015(e)(1). But the cap does not apply where the policyholder “has — (I) decreased the amount of the deductible; or (II) increased the amount of coverage.”4
An Oregon association that raises its residential condominium building association policy limit to satisfy the lenders' 100-percent-replacement-cost-value coverage-sufficiency rule has, on the face of the statute, increased the amount of coverage — and can lose the glide path, moving to the full-risk rate in a single renewal.
Coastal and riverine Oregon is where this bites: Clatsop, Tillamook, Lincoln, Coos and Curry counties, and communities along the Willamette, Columbia and Rogue.
A board's options before it resolves
Four things.
First, survey owners' actual HO-6 limits before adopting a per-unit deductible, not after. The association is creating the exposure; it should know how many owners can absorb it.
Second, if the board proceeds, give owners a written statement of the specific limit their HO-6 must carry, and repeat it annually. ORS 100.435 lets the association require owners to carry not less than the deductible amount; requiring it is meaningless if nobody is told the number.
Third, get the House Bill 2563 explanation. Since September 1, 2026, an Oregon insurer must give “a clear and reasonable explanation of the reasons for any increase in the premium amount for a qualified policy upon renewal,” including up to four significant contributing factors. That is the document that tells a board whether a deductible increase is actually the right lever.
Fourth, check whether a deductible buy-back policy solves it instead. Both lenders now expressly permit one to meet the deductible requirement, which keeps the building financeable without pushing the exposure onto owners.
Our Oregon insurance requirements page covers what the Condominium Act and the declaration require the association to carry in the first place.
What to watch next
Whether Oregon associations actually adopt per-unit deductibles at the new ceiling, and whether the first significant Oregon loss after they do produces a dispute about who was told what. The statutory machinery is old; the $50,000 number is new; and the combination has not yet been tested by a fire in a building where half the owners are underinsured.
Related Oregon HOA Topics
- Bulletin 2026-C, Freddie Mac Single-Family Seller/Servicer Guide, March 18, 2026 — condominium and property insurance updates ↩
- ORS 100.435, insurance for condominiums — deductible resolutions and assignment of responsibility ↩
- Oregon homeowners' insurance update, Division of Financial Regulation presentation, 2025 interim ↩
- 42 U.S.C. § 4015, National Flood Insurance Program chargeable premium rates ↩
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