Rhode Island HOA Insurance Requirements

Section 1: Overview — How HOA insurance is regulated in Rhode Island

Rhode Island imposes a statutory association insurance mandate on condominiums through the Rhode Island Condominium Act, but non-condominium planned communities have no comprehensive statutory insurance mandate and rely on the recorded declaration. The condominium insurance obligation sits in R.I. Gen. Laws § 34-36.1-3.13, which requires the association to maintain property and liability insurance from the time of the first unit conveyance.¹

Non-condominium planned-community HOAs aren't governed by a dedicated common-interest statute. Their insurance obligations come from the recorded covenants, conditions, and restrictions (CC&Rs), with corporate-formality scaffolding supplied by the Rhode Island Nonprofit Corporation Act (R.I. Gen. Laws § 7-6-1 et seq.) where the association is incorporated.³

The condominium insurance section descends from the 1980 Uniform Condominium Act, which the Rhode Island Supreme Court has recognized the Act "essentially incorporated," applicable to condominiums created after July 1, 1982; Rhode Island did not adopt the 1982 Uniform Common Interest Ownership Act.² The property and liability mandate is conditioned on coverage being "reasonably available," a qualifier that survives in the current Rhode Island text.¹

Fidelity (crime) and directors-and-officers (D&O) coverage aren't statutory mandates in Rhode Island; they're driven by the declaration or by lender requirements.¹ Nationally, Rhode Island is a 1980-UCA condominium-mandate state whose planned-community insurance resembles the CC&R-primary states, operating within an intensely coastal insurance market. The sections below detail the statutory framework, coverage allocation, and the federal overlay.

Section 2: The statutory insurance framework

2A. The condominium insurance mandate

The condominium insurance provision is R.I. Gen. Laws § 34-36.1-3.13, verified against the official Rhode Island General Laws.¹ It descends from Section 3-113 of the 1980 Uniform Condominium Act, distinct from Section 3-113 of the 1982 UCIOA adopted by Alaska, Colorado, and other UCIOA states; Rhode Island did not adopt UCIOA for condominiums.²

Beginning no later than the first conveyance of a unit to a person other than a declarant, the association must maintain, "to the extent reasonably available," two coverages: (1) property insurance on the common elements against all risks of direct physical loss, and (2) liability insurance, including medical payments insurance, covering occurrences arising out of the use, ownership, or maintenance of the common elements.¹ The "reasonably available" qualifier is express in subsection (a), and subsection (c) requires the association to promptly notify all unit owners, by hand delivery or United States mail, if the required insurance becomes unavailable.¹

The property valuation standard is not less than 80% of the actual cash value of the insured property, after application of any deductibles, measured at purchase and at each renewal, exclusive of land, excavations, foundations, and other items normally excluded from property policies.¹ This is an actual-cash-value floor, not a replacement-cost command, which is a material point: lender and federal overlays (discussed in 2C) impose a higher, replacement-cost standard. For buildings whose units have horizontal boundaries described in the declaration, the property insurance must also include the units, but need not include improvements and betterments installed by unit owners.¹ Liability coverage carries no statutory dollar minimum; the amount is set by the executive board but not less than any amount specified in the declaration.¹

Insurance proceeds for a covered property loss are payable to a designated insurance trustee, or otherwise to the association, and are held in trust and disbursed first for repair or restoration.¹ Damaged or destroyed property must be repaired or replaced promptly by the association unless the condominium is terminated, repair would be illegal, or 80% of unit owners vote not to rebuild; the cost of repair in excess of proceeds, after the deductible, is a common expense unless the declaration or bylaws provide otherwise.¹

On deductibles, Rhode Island doesn't use the 2008 UCIOA owner-charge language. Instead, following amendments effective June 28, 2022, and June 24, 2025, the statute makes a unit owner's own policy the primary insurance for any loss to the owner's unit that falls within the association's master-policy deductible, and, if the owner fails to maintain the required coverage, places the deductible expense on that owner.¹

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

Non-condominium planned-community HOAs in Rhode Island have no dedicated statute and no statutory insurance mandate. Their insurance is set entirely by the recorded declaration.³ Rhode Island hasn't enacted a comprehensive planned-community or common-interest-ownership act, so there's no statutory backstop equivalent to § 34-36.1-3.13 for these communities.³

The order of precedence differs by community type. For condominiums, the Rhode Island Condominium Act governs to the extent it speaks to insurance, then the declaration, then the bylaws, then rules. For planned communities, the declaration is the primary source with no overriding insurance statute.¹

Where a planned-community association is incorporated, the Rhode Island Nonprofit Corporation Act supplies corporate-governance context, including director indemnification under § 7-6-6, but it doesn't impose an insurance requirement.⁴ The practical implication is direct: for a planned community, the coverage analysis begins and ends with the declaration and any lender requirements.

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

For condominiums, the declaration may vary or require additional coverage; the statute expressly allows the declaration to require other insurance and lets the association carry any other insurance it deems appropriate.¹ For planned communities, the declaration is the primary source with no overriding insurance statute.³

Fidelity (crime) insurance and D&O liability insurance aren't statutory mandates in Rhode Island. Section 34-36.1-3.13 doesn't require either coverage.¹ The Rhode Island Nonprofit Corporation Act permits a corporation to purchase and maintain insurance on behalf of its directors and officers and permits indemnification, but it doesn't require insurance.⁴ In Rhode Island, fidelity and D&O coverage are therefore declaration-driven or lender-driven.

The federal and secondary-market overlay applies regardless of state law and, in practice, sets the operative floor for financed communities. Fannie Mae requires condominium and PUD master policies at least equal to 100% of the replacement cost value of the project's improvements, with a maximum allowable deductible of 5% of the master property insurance coverage amount for all required perils, and general liability of at least $1,000,000 per occurrence; Freddie Mac's requirements are aligned.⁵ Fannie Mae requires fidelity/crime coverage for condominium and co-op projects with more than 20 units, with limited exceptions.⁶ FHA condominium project approval requires master hazard insurance at 100% of insurable replacement cost, at least $1 million liability per occurrence, flood insurance in Special Flood Hazard Areas, and, for projects with more than 20 units, fidelity insurance in the greater of three months' aggregate assessments plus reserve funds or the minimum amount required by state law.⁷ These federal floors exceed the state actual-cash-value standard and drive fidelity, flood, and property coverage decisions, including for planned communities that have no statutory floor at all. The Fannie Mae and FHA fidelity formulas are lender and federal requirements, not Rhode Island statute.

Rhode Island's coastal geography shapes real coverage decisions. Narragansett Bay and Atlantic hurricane and windstorm exposure drives named-storm and hurricane percentage deductibles and tighter shoreline carrier availability, and coastal and bay flooding brings the National Flood Insurance Program into play for units in Special Flood Hazard Areas.⁸ Rhode Island's hurricane-deductible framework for residential dwelling policies is regulated by the Department of Business Regulation, Insurance Division, which regulates carriers and market conduct, not the coverage an association must carry.⁸ These are market and regulatory realities affecting availability and cost, not statutory HOA coverage mandates.

Section 3: Coverage allocation and compliance obligations

A. Association coverage obligations

For condominiums, the master policy must carry all-risk property insurance on the common elements — and, in buildings with horizontal unit boundaries, the units — at not less than 80% of actual cash value after deductibles, plus liability insurance including medical payments coverage; this is a statutory obligation under § 34-36.1-3.13, subject to the "reasonably available" qualifier.¹ For planned communities, the association insures whatever the declaration requires; there's no statutory floor, so the CC&Rs are the sole source — contractual, not statutory.³

B. Coverage allocation between association and owners

The condominium master policy covers common elements and, where applicable, the units, but need not cover owner-installed improvements and betterments; the owner is responsible for those items, interior finishes, and personal property, typically through an individual HO-6 unit-owner policy.¹ The statute expressly preserves the owner's right to insure the unit for the owner's own benefit and makes the owner's policy primary for improvements and betterments the association doesn't cover; this allocation applies to condominiums and may be adjusted by the declaration.¹ The most common reader error is assuming the master policy covers the unit interior or owner improvements; it doesn't by default. For planned communities, the same interior-versus-common allocation is a matter of contract under the CC&Rs, not statute.³

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

By default in condominiums, the unit owner's own policy is primary for the master-policy deductible attributable to a loss to that owner's unit, and repair costs exceeding proceeds after the deductible are a common expense unless the declaration or bylaws provide otherwise; this is statutory under § 34-36.1-3.13.¹ Proceeds are held in trust and disbursed first for repair or restoration, and the association must repair or replace promptly unless a statutory exception applies.¹ Owners face loss-assessment exposure for uninsured amounts spread as common expenses; coastal hurricane percentage deductibles can shift a large share of a windstorm loss onto owners through such assessments and through the owner's own deductible responsibility.⁸ For planned communities, deductible and proceeds treatment is entirely contractual under the declaration.³

D. Fidelity, D&O, and disclosure

Fidelity and D&O coverage are declaration-driven or lender-driven, not statutory, in both condominiums and planned communities.¹⁴ On disclosure, the condominium statute requires the insurer to issue certificates or memoranda of insurance to the association and, on written request, to any unit owner, mortgagee, or beneficiary, and prohibits cancellation or nonrenewal until 30 days after notice to those parties; this is statutory for condominiums.¹ The statute also entitles an owner, on written request after a covered loss, to a copy of the damage appraisal within 14 calendar days.¹ Planned-community disclosure obligations, if any, are contractual under the CC&Rs.³

Section 4: Recent legislative and judicial activity

A. Recent bills

B. Recent appellate rulings

No Rhode Island Supreme Court decision issued in the past 36 months squarely addresses condominium or HOA association insurance obligations, master-policy coverage allocation, deductible disputes, or the distribution of insurance proceeds in a common-interest community. Rhode Island has no intermediate appellate court; civil insurance disputes proceed through the Superior Court and are appealed directly to the Rhode Island Supreme Court.¹¹ The most material recent movement in this area has been legislative rather than judicial.

C. Active legislative debates

Recent pressure on Rhode Island association insurance is primarily market-driven — coastal windstorm availability and hurricane percentage deductibles — rather than statutory, and legislative attention has centered on condominium deductible allocation and disclosure rather than on a new coastal-insurance mandate.⁸

Section 5: National positioning and related coverage

Rhode Island sits in the first of three broad categories of association insurance regulation: condominium-statute states on the UCA or UCIOA model that impose a statutory condominium insurance mandate keyed to Section 3-113, with Rhode Island on the 1980 UCA version. The second category is comprehensive non-uniform prescriptive states such as Florida (Chapter 718) and California (Davis-Stirling). The third is CC&R-primary states such as Alabama and Arkansas. Rhode Island is a small state with intense coastal exposure, and on the planned-community insurance question it resembles the CC&R-primary states, because it has no comprehensive planned-community insurance statute.¹³ For a multi-state operator entering Rhode Island, condominium obligations track the 1980 UCA Section 3-113 pattern, planned-community coverage is declaration-driven, and coastal windstorm availability is a Rhode Island-specific market factor. Rhode Island hasn't moved toward a comprehensive planned-community statute, and no such enactment occurred through the 2026 session.³

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

1. R.I. Gen. Laws § 34-36.1-3.13 (Insurance), Rhode Island General Assembly ↩
2. America Condominium Ass'n v. IDC, Inc., Rhode Island Supreme Court (Act "essentially incorporated the language contained in the Uniform Condominium Act," applicable to condominiums created after July 1, 1982) ↩
3. Rhode Island Nonprofit Corporation Act, R.I. Gen. Laws Chapter 7-6, Rhode Island General Assembly ↩
4. R.I. Gen. Laws § 7-6-6 (Indemnification), Rhode Island General Assembly ↩
5. Fannie Mae Selling Guide B7-3-03, Master Property Insurance Requirements for Project Developments (100% replacement cost value; 5% maximum deductible; $1,000,000 liability per occurrence) ↩
6. Fannie Mae Selling Guide B7-4-02, Fidelity/Crime Insurance Requirements for Project Developments (required except for projects of 20 units or fewer, among other exceptions) ↩
7. FHA Condominium Project Approval Questionnaire, Form HUD-9992, and HUD Handbook 4000.1, Section II.C ↩
8. Property Insurance and Weather Related Claims, 230-RICR-20-05-13, Rhode Island Department of Business Regulation, Insurance Division ↩
9. 2025 H 5587, Rhode Island General Assembly (P.L. 2025, ch. 177, effective June 24, 2025) ↩
10. 2025 S 0507, Rhode Island General Assembly (P.L. 2025, ch. 178, effective June 24, 2025) ↩
11. Rhode Island Supreme Court, Rhode Island Judiciary ↩