Glossary of HOA Insurance Terms

Short-Rate Cancellation

When a policy is terminated prior to the expiration date at the policyholder’s request, the earned premium charged will be more than the pro-rata earned premium. Generally, the returned premium is approximately ninety percent of the pro-rata return premium. However, an insurance company may establish its own short-rate schedule.


An amount less than the full building value that is applied to specified areas of coverage. An example would be when a building is insured for $10,000,000 and there is a $25,000 limit for mold damage. The limitation for mold damage would be a sublimit.


An attachment or endorsement to an insurance policy that modifies clauses and/or provisions of the policy. Riders may include or exclude coverage.


Federal terrorism insurance coverage that was created after 9/11, to cover federally certified acts of terrorism.

Unit Interior Coverage

The insurance coverage that protects the improvements of a condominium from the drywall in.

Unit Owner Policy

The policy that a condominium unit owner purchases to provide coverage for those items that are not covered by the master policy. This is also referred to as an HO-6 policy.

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