How does an HOA board levy an insurance deductible assessment after a loss?

By OurHOA · General information · Revised October 28, 2026

How an HOA board decides who pays the master policy deductible after a claim, bills one owner or all owners, and gives the notice TX, FL and CO law requires.

Part of the HOA board handbook: treasurer and money.

The short answer

When the association's carrier pays a claim, it subtracts the deductible, and someone still has to pay that amount. The board settles it in three steps: confirm what the policy actually paid, find out who the declaration and state law say carries the deductible, then give the notice and take the vote that kind of charge needs. Condominium statutes set a default. Florida section 718.111(11)(j) makes deductibles a common expense unless an owner's negligence or rule violation caused the damage. Texas section 82.111(k) lets the declaration decide, or a recorded board resolution if the declaration is silent. Colorado section 38-33.3-313(6) lets the association charge negligent owners and split a deductible among damaged units. For a Florida or Texas HOA of single-family lots, the declaration decides, because neither Chapter 720 nor Chapter 209 has a deductible rule. Rules vary by state and by your governing documents. This guide is education, not legal advice, and a five-figure charge against one owner is worth an hour of the association attorney's time before the letter goes out.

Confirm the claim numbers first

Get the carrier's written statement of loss before anyone talks about who owes what. It shows the covered amount, the deductible applied and what was paid. Read the deductible line closely. Many master policies now carry a separate water damage deductible, and wind or hail deductibles are often a percentage of the building's insured value, not of the loss. A 2 percent wind deductible on a building insured for $3,000,000 is $60,000, even if the roof repair costs $75,000. If the repair costs less than the deductible, there is no insurance payment and no deductible to assess. Texas section 82.111(j) puts that cost on whoever would have been responsible for the repair without insurance, which makes it an ordinary maintenance question under the declaration. Two Florida rules affect timing. Under 718.111(11)(j)3, if the association collects a repair cost from an owner and insurance later reimburses it, the association has to pay the owner back. Under (j)4, the association does not have to pay as a common expense for a loss an owner knew about and did not report until the claim was settled or denied as late. Our guide on handling an HOA insurance claim after a storm covers the claim itself.

Who pays under Texas, Florida and Colorado law

Texas condominiums: when the loss exceeds the deductible, section 82.111(k) says the dedicatory instruments decide who pays the deductible and the costs incurred before insurance money arrives. If they are silent, the board may decide by resolution, and that resolution becomes a dedicatory instrument that must be recorded in every county where the declaration is recorded. With no resolution, the deductible is a common expense. Under (l), if damage is due wholly or partly to an act or omission of an owner or the owner's guest, the association may assess the deductible and any other cost above the insurance proceeds against that owner. Section 82.002(c) applies 82.111 to condominiums declared before 1994 as well, without voiding existing declaration terms. Florida condominiums: 718.111(11)(j) makes deductibles and damage above coverage a common expense, except that an owner pays the uninsured cost when the damage came from intentional conduct, negligence, or a failure to follow the declaration or rules by the owner, family, tenants, guests or invitees. A no-fault leak from a unit's water heater stays a common expense unless the owners have voted, by a majority of the total voting interests under (k), to opt out and use the declaration's allocation instead. Colorado: section 313(6) lets the association adopt written, nondiscriminatory policies on claims and deductible responsibility, assess all deductibles it paid against negligent owners who caused the loss or benefited from the repair, and charge each damaged unit a pro rata share when a loss hits more than one unit. Section 313 is not on the list in 38-33.3-117 that reaches communities created before July 1, 1992, so older Colorado communities rely on their declarations.

Charging one owner or spreading it across everyone

A charge to one owner is a damage charge, and Texas requires a hearing offer first. In a Texas HOA, section 209.006 requires written notice by certified mail before the association may charge an owner for property damage. The notice describes the damage, states the amount, and tells the owner they may request a hearing under section 209.007 by the 30th day after mailing. Texas condominiums follow section 82.102(d), which requires a written notice describing the damage, stating the charge, and offering a board hearing if the owner asks within 30 days. Section 82.102(e) adds that the owner must get notice of a charge within 30 days after it is levied. Build the file before you send anything: the plumber's or restoration company's report naming the source, photos, and the policy page with the deductible. A community-wide loss, such as a hailstorm across every roof, usually becomes a special assessment allocated by each lot's share of common expenses. In a Florida condominium, notice of a board meeting to consider a nonemergency special assessment must be mailed, delivered or emailed and posted at least 14 days ahead, backed by an affidavit, under 718.112(2)(c)1, and must state the estimated cost and purpose under (c)3. Section 718.116(10) then requires a written notice of the assessment's purpose, and the money may be spent only on that purpose. A Florida HOA follows 720.303(2)(c)2: the notice must say assessments will be considered and describe them, and it goes out at least 14 days before the meeting. The mechanics of a special assessment vote are in our guide on how to levy an HOA special assessment.

A worked example and timeline

A 40-unit Colorado condominium has a $25,000 water deductible. A supply line fails in Unit 12 and damages Units 12, 13 and 4. Repairs total $86,000: $40,000 in Unit 12, $30,000 in Unit 13 and $16,000 in Unit 4. The carrier pays $61,000. The association's 313(6) policy says the source owner pays the full deductible when negligent, and otherwise each damaged unit pays a share in proportion to its repair cost. The plumber reports an ordinary failure of a 4-year-old line, so the board finds no negligence and splits the $25,000: Unit 12 pays $11,628, Unit 13 pays $8,721 and Unit 4 pays $4,651. A workable sequence: day 0, loss reported and claim opened; days 30 to 60, statement of loss received; next board meeting, the treasurer presents the claim file and the board votes in open session; within a week, letters go out with the statement of loss attached; 30 days for questions or a hearing request; payment due 30 days after that, with a payment plan offered on request. If the association later recovers money from a negligent contractor, credit the owners who paid.

Wording you can adapt

Motion: 'Based on the carrier's statement of loss dated [date] for claim [number], the board finds that the association paid a $[amount] deductible for the [date] water loss that began in Unit [number]. Under Article [number] of the declaration and the association's insurance deductible policy, the board assesses $[amount] to Unit [number], due [date], and directs the treasurer to send the notice approved at this meeting.' Owner letter paragraph: 'On [date], water from [source] in your unit damaged your unit and [other units or common elements]. The association's insurer paid the claim minus a $[amount] deductible. Under [declaration article or policy], the board voted on [date] to assess $[amount] of that deductible to your unit. The statement of loss and the repair report are enclosed. You may request a hearing before the board by [date]. Your HO-6 policy may include loss assessment coverage, so send this letter to your insurance agent.' Have the attorney review the template once, then reuse it.

Mistakes boards make

Billing from habit instead of reading the declaration. A Florida condominium cannot shift a no-fault deductible to the source owner without the (k) opt-out vote, whatever the last board did. Calling something negligence without evidence. An old water heater is not negligence by itself, and a charge built on a guess invites a dispute. Get the cause in writing from the repair company. Treating owners differently. Colorado's statute requires nondiscriminatory policies, and an owner billed in full after the board quietly absorbed a director's leak has an easy argument anywhere. Adopt the written policy before the next loss, apply it every time, and record the vote in the minutes. Forgetting the Texas recording step. An 82.111(k) resolution that never reaches the county records does not do what the board intended. Surprising owners. When the board raises a deductible at renewal, tell owners the new amount and suggest they ask their agent about loss assessment coverage. Florida condominium boards must set deductibles at a noticed board meeting under 718.111(11)(c)3. Owners' questions about these charges are answered in our guide on what an HOA deductible assessment is.

Sources

These guides are general education for HOA boards and residents, not legal, tax, or financial advice. Rules vary by state and by your community's governing documents - check with a professional for your situation.

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