Under FNMA and FHA guidelines, condominium unit owners are responsible for obtaining what is known as an HO-6 insurance policy, which covers everything in their units that may not be covered by the association's policy (including personal items, floor and wall coverings, fixtures, appliances, etc.). These policies may also cover damage to the common elements or other units when the problem originates from the insured unit (such as an overflowing bathtub).
If an owner is uninsured or under insured, however, the board may have no choice but to file a claim with the association's policy even if the damage was caused by that owner's negligence or willful misconduct. If it can be shown that the unit owner was responsible for the damage, the board has the right to charge the cost of the deductible back to that unit owner.
Because the association's deductible could be $1,000 or more, a proper HO-6 policy is likely a less expensive option for any unit owner.