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Get Directions Did your condo association’s insurance premium jump at your last renewal? You are not alone. Across Chicago and the suburbs, carriers keep raising rates. Storms and hail drive more claims every year. On top of that, water damage from burst pipes and sewer backups is still the most common loss in our older buildings.
When those costs hit, boards often cover the gap with a special assessment. And then unit owners start asking a fair question: who was supposed to pay for this?
The answer usually comes down to one phrase in your master policy. Is it “all-in” or “bare walls”? Most board members have never been told which one their association carries. So let’s break down the difference, why it matters right now, and what your board should check before the next renewal.
What your master policy actually covers
Every condo association carries a master policy. It insures the building and the common elements. Under the Illinois Condominium Property Act, your association must insure those elements and the units for full replacement cost, and it must carry liability coverage too (765 ILCS 605/12).
But the Act does not say where the master policy stops and each owner’s policy begins. Instead, your declaration and the master policy form draw that line. And that is exactly where “all-in” versus “bare walls” comes in.
All-in coverage
An all-in policy goes the furthest. It covers the building, the common elements, and the original fixtures inside each unit. Think cabinets, flooring, and the layout as the unit was first built.
So after a covered loss, the association’s policy rebuilds most of the unit itself. Owners usually pay only for their personal belongings and any upgrades they added.
Bare walls coverage
A bare walls policy covers less. It protects the building structure and common elements, but it stops at the unfinished interior. In other words, it reaches the studs, subfloor, and ceiling, and no further.
Everything inside that shell becomes the owner’s job to insure. That means drywall, flooring, cabinets, appliances, and fixtures, all through their own HO-6 policy. As a result, the same kitchen fire can produce two very different bills, depending on which structure your association uses.
Why this leads to special assessments
Here is the part that catches boards off guard. Sometimes a loss costs more than the master policy covers. Other times it falls into a gap between the master policy and owners’ individual coverage. Either way, the shortfall does not vanish.
The association absorbs it. And under 765 ILCS 605/18, the board can then levy a special assessment to make up the difference. The gap tends to open up in a few common ways:
- High master deductibles. Deductibles have climbed sharply. If yours is $25,000 or $50,000, a single water loss can fall entirely on the association before the policy pays a cent. Then that cost flows to owners as an assessment.
- Bare walls coverage that owners don’t match. Suppose your association is bare walls, but an owner carries a thin HO-6 policy. Now the unrepaired interior becomes a problem for the whole building.
- Underinsured replacement cost. Older Chicago buildings often cost far more to rebuild to current code than their limits assume. So associations come up short after a major loss.
Illinois does give owners one check on runaway costs. Under 765 ILCS 605/18, owners holding at least 20% of the votes can petition for a vote when assessments would rise more than 115% over the prior year. Still, that is a reaction to a problem, not a way to prevent one. The better path is simpler: understand the coverage structure and close the gaps before a loss ever happens.
What your board should check before renewal
Use this short checklist at your next renewal or board meeting.
- Find out which structure you have. Read your master policy declarations page, or just ask your agent. Does it say all-in, all-inclusive, single entity, or bare walls? If no one on the board knows, that is your first red flag.
- Match it to your declaration. Your declaration spells out each owner’s insurance duties. The master policy and the declaration need to agree. When they conflict, disputed claims usually follow.
- Review your loss assessment limits. Owners need HO-6 policies with enough loss assessment coverage to absorb their share of the master deductible. A $25,000 deductible and $1,000 of loss assessment coverage simply do not match.
- Re-check replacement cost every year. Construction and code-upgrade costs keep rising. So a replacement figure from five years ago is probably too low today.
- Tell your owners which structure you have. Owners cannot buy the right HO-6 policy if they do not know the answer. A one-page summary at the annual meeting prevents most surprises.
The bottom line
All-in versus bare walls is not just jargon. It is the one line that decides who pays after a loss, and how big the next special assessment might be. And with premiums and deductibles rising across the Chicago area, the difference matters more than ever.
So which associations come through a tough renewal in the best shape? Usually the ones whose boards understand their coverage and have already closed the gaps.
Not sure whether your association is all-in or bare walls? Or whether your master deductible and your owners’ loss assessment limits actually line up? That is exactly the kind of review we run for condo and HOA boards across Chicago and central Illinois. Reach out to Weer Insurance Group for a no-obligation review of your association’s master policy.
This article is general information, not legal or insurance advice for any specific association. Coverage rules and assessment procedures come from the Illinois Condominium Property Act, 765 ILCS 605, your association’s declaration, and your own policy. Always consult your association’s attorney and a licensed agent before you make coverage decisions.
