What the Association Must Carry

Beginning no later than the day the first unit is conveyed to someone other than a declarant, the association shall maintain, to the extent reasonably available, two policies.

• Blanket property insurance or guaranteed replacement cost insurance on the physical structures in the project, including the common areas and facilities, the limited common areas and facilities, and the units, against all risks of direct physical loss commonly insured against, including fire and extended coverage perils.
• Liability insurance covering occurrences commonly insured against for death, bodily injury, and property damage arising out of or in connection with the use, ownership, or maintenance of the common areas and facilities.

Note that the required property coverage reaches the units themselves. 

"Reasonably available" has a defined meaning: available using typical insurance carriers and markets, irrespective of the association's ability to pay. Cost alone does not make coverage unavailable.

If the association learns that either policy is not reasonably available, it must notify all unit owners within seven calendar days.

How Much, and What Must Be Included

Coverage may not be less than 100% of the full replacement cost of the insured property, measured at purchase and at each renewal, excluding items normally excluded from property policies.

Your finishes and upgrades are covered, and this is the provision that owners most often do not know. Property insurance shall include coverage for any fixture, improvement, or betterment installed at any time to a unit or to a limited common area associated with a unit, whether installed in the original construction or in any remodel or later alteration. The statute lists floor covering, cabinets, light fixtures, electrical fixtures, heating or plumbing fixtures, paint, wall covering, and windows.

A remodel you paid for yourself does not fall outside the association's required policy.

Detached units are the exception. Unless the declaration provides otherwise, the association is not required to insure a loss to a unit that is not physically attached to another unit or to a structure that is part of a common area or facility.

The Deductible, and Why It Lands on You

Each unit owner is an insured person under the association's property policy.

When a loss is covered by both the association's policy and your own, the association's policy provides primary coverage, but you are responsible for the association's deductible, and the building property coverage of your own policy, often called coverage A, applies to that portion of the loss.

Your share is proportional, not the whole deductible. It is calculated by applying the unit damage percentage, the share of the total covered loss attributable to damage to your unit and its appurtenant limited common areas, to the deductible amount. If you do not pay within 30 days after substantial completion of the repairs, the association may levy an assessment for it.

A notice failure moves that liability back to the association. The association must notify each owner of this deductible obligation and of any change in the amount. One that fails to do so is responsible for the portion it could otherwise have assessed to you, to the extent you have no coverage that would apply. If it gave notice of the deductible but not of a later increase, it is responsible only for the amount of that unnoticed increase.

If you were never told what the deductible is, say so before paying an assessment for it.

The association must also set aside an amount equal to its deductible, or at least $10,000 if the deductible exceeds that.

Small Losses: Your Policy Goes First

If the management committee determines, in the exercise of the business judgment rule, that a covered loss is likely not to exceed the association's deductible, then until it becomes apparent otherwise: your policy is treated as primary for damage to your unit and its appurtenant limited common areas, the association remains responsible for covered loss to the common areas, and the association need not tender the claim to its insurer.

An owner with no policy is responsible for that damage, and the association may recover what it spends to remediate the unit through an assessment. This is the practical case for carrying your own unit policy.

Protections That Cannot Be Written Around

Your act or omission cannot void the association's policy. Unless you are acting within the scope of your authority on behalf of the association, a unit owner's act or omission may not void the property or liability policy, and may not be a condition to recovery under it.

The insurer waives subrogation against you. An insurer under a policy that the association obtains waives its right to subrogation against the unit owner and against any person residing with the owner, if the owner resides in the unit.

Governing documents cannot override this section. A policy issued to the association may not be inconsistent with it, and any provision of a declaration, bylaw, rule, or other governing document contrary to it has no effect. 

You always keep the right to insure yourself. Neither the governing documents nor the association's policy may prevent a unit owner from obtaining insurance for the owner's own benefit. 

The declaration or bylaws may require the association to carry additional types of insurance, and the committee may obtain more coverage than the minimum if it considers that appropriate.

Where the Proceeds Go

Insurance proceeds for a loss under the association's property policy are payable to an insurance trustee the association designates or, if none is designated, to the association, and may not be payable to a holder of a security interest. The trustee or association holds them in trust for the association, the unit owners, and lien holders.

If damaged property is to be repaired, proceeds are disbursed first for that repair or restoration. Any surplus, after the property is completely restored or the project terminated, is payable to the association, unit owners, and lien holders as the declaration provides.

You may request a certificate or memorandum of insurance, and the insurer must issue one on written request. Cancellation or nonrenewal follows the procedures in Section 31A-21-303.

One limit worth knowing: a management committee that buys the required coverage is not liable to owners if the proceeds turn out to be insufficient to cover 100% of the full replacement cost at the time of loss.

Rebuilding After a Disaster: The 100-Day Rule

The condominium act handles reconstruction in its own sections.

If proceeds are sufficient to reconstruct the building, they shall be applied to that reconstruction. "Reconstruction" means restoring the building to substantially the condition it was in before the disaster, with each unit and the common elements having the same vertical and horizontal boundaries as before.

If proceeds are insufficient, then, unless the declaration or bylaws provide otherwise, the damage shall still be promptly repaired using whatever proceeds exist, and the unit owners are liable for assessment for the deficiency.

There is one path out of rebuilding, and it has a deadline. If three-fourths or more of the building is destroyed or substantially damaged, and the unit owners, by a vote of at least three-fourths, do not voluntarily make provision for reconstruction within 100 days of the damage, the manager or committee records a notice of those facts with the county recorder. On recording, the property becomes owned in common by the unit owners in their previous undivided percentages, existing liens transfer to those undivided interests in the same priorities, and the property becomes subject to a partition action at the suit of any unit owner.

Read the trigger carefully: the 100 days and the three-fourths vote are how a condominium project is wound up after a catastrophe rather than rebuilt. Both thresholds must be met.

Two Things To Check Before a Claim

• The association's deductible, and whether you were ever notified of it or of an increase. That notice decides whether the deductible share is yours or the association's
• Whether you carry a unit policy with building property coverage. For a loss the committee expects to fall under the deductible, your policy is treated as primary, and an owner without one absorbs the damage

Every deadline on this page also appears in Deadlines and Thresholds. Because the maintenance rule expressly yields to this section, read Maintenance and Repair alongside it. If the association will not produce its certificate of insurance or disclose the deductible, read Advisory Opinions and Where To Take a Problem.

Reviewed against the Utah Code, current as of September 9, 2026.