Condo Insurance in Nevada — What Your HOA Policy Doesn’t Cover

If you own a condo in Nevada, NRS 116 says the HOA master policy is supposed to cover the unit, not just the common elements. That still leaves your upgrades, your belongings, and a master deductible that can be passed to you. In Las Vegas high-rises that deductible can run $50,000 to $100,000. Default loss assessment on an HO-6 is often $1,000 to $2,000. Below we cover what the master policy actually pays, what your HO-6 has to carry, and the water damage that drives most Nevada condo claims.

Nevada’s HOA Insurance Requirements Under NRS 116

Nevada’s Uniform Common-Interest Ownership Act — NRS Chapter 116 — requires condo associations to maintain property insurance on the common elements and the units themselves, to the extent reasonably available. That’s an important distinction. In Nevada, the association’s insurance obligation extends beyond just the building exterior and common areas. It’s supposed to include the unit.

But “the unit” doesn’t mean everything inside it. Your upgrades, improvements, personal property, and betterments are still your responsibility. And the master policy comes with a deductible that can be passed to unit owners through special assessments. If your association carries a bare walls policy, you’re responsible for all interior finishes — drywall, flooring, cabinets, fixtures, everything from the studs in.

Las Vegas and Henderson Condo Market

The Las Vegas Valley has one of the highest concentrations of condos and townhomes in the West. High-rise condos on the Strip corridor, mid-rise communities in Summerlin and Henderson, and older condo conversions throughout the Valley all have different master policy structures. Many of the high-rise associations carry higher deductibles — sometimes $50,000 to $100,000 — which means larger potential special assessments for unit owners.

If you bought a condo in a Las Vegas high-rise, your loss assessment exposure could be significant. And if you’re in an older building where the association’s reserves are thin, the risk of a special assessment after a major loss is even higher.

Your HO-6 Policy in Nevada

Your condo insurance — the HO-6 — has a Coverage A limit that you choose when the policy is set up. That limit is the most your carrier will pay for interior damage. If it’s too low, the gap is yours. With construction costs rising across the Las Vegas market, a Coverage A limit set five years ago may be significantly short of today’s rebuild costs.

Make sure your personal property coverage is adequate too. There’s no automatic formula on an HO-6 — the number is whatever your agent entered. If you have $80,000 in furniture and belongings and your policy shows $25,000, you’re exposed. Add a replacement cost endorsement on personal property so you get today’s replacement value, not a depreciated payout.

Water Damage in Nevada Condos

Water damage is the most common claim in Nevada condos. Desert heat degrades plumbing components faster than moderate climates. A sudden pipe burst is typically covered. A slow leak behind the wall that’s been going on for months may not be. Sewer backup requires a separate endorsement. Make sure your HO-6 addresses these exposures.

Loss Assessment Coverage

Nevada law requires associations to maintain reserves and conduct reserve studies at least every five years under NRS 116.31152. But many associations are underfunded. When a major loss exceeds reserves, the board passes a special assessment. Loss assessment coverage on your HO-6 helps cover your share. Default limits are typically $1,000 to $2,000 — far too low for a Las Vegas high-rise with a $100,000 master policy deductible. Increase this coverage and ask your agent how your policy handles deductible-related assessments versus other types.

What to Do

Get a copy of your HOA’s master policy declarations page. Find out whether it’s bare walls, single entity, or all-in. Review your Coverage A limit against today’s rebuild costs. Check your loss assessment coverage. And read your CC&Rs — in Nevada, the governing documents define the insurance split.

We Can Help

If you want help reviewing your condo policy, get a quote or give us a call. We insure condo owners across the Las Vegas Valley and throughout Nevada. Learn more about our Nevada insurance services.