When a condominium or homeowners association purchases property insurance, one of the most important—and often overlooked—decisions is the policy form. The form determines which types of losses are covered, how claims are evaluated, and where coverage gaps may exist.
For community associations, misunderstandings around property forms can lead to unpleasant surprises at claim time. Knowing the difference between Basic, Broad, and Special forms helps boards make informed decisions and avoid uninsured losses.
What Is a Property Insurance “Form”?
A property insurance form defines the perils, or causes of loss, that are covered under the policy. Basic and Broad forms are written on a named-peril basis, meaning only listed causes of loss are covered. Special form coverage is written on an open-peril basis, meaning all causes of loss are covered unless specifically excluded.
Basic Form Coverage
Basic Form property insurance provides the most limited level of coverage. It typically covers losses caused by fire or lightning, windstorm or hail, explosion, smoke, riot or civil commotion, aircraft or vehicles, and limited vandalism. Any loss not specifically listed is not covered.
Broad Form Coverage
Broad Form coverage expands on the Basic Form by adding additional perils such as falling objects, weight of snow, ice or sleet, accidental discharge of water from plumbing systems, collapse caused by covered perils, and freezing of plumbing systems. Coverage is still limited to named perils.
Special Form Coverage
Special Form coverage provides the broadest level of protection. Instead of listing covered perils, it covers all causes of loss unless specifically excluded. Common exclusions include flood, earthquake, wear and tear, mechanical breakdown, mold limitations, and ordinance or law unless endorsed.
Why Property Form Selection Is Critical for Associations
Condominium associations and HOAs face unique risks due to shared structures, high replacement costs, and statutory insurance requirements. Choosing a limited form to reduce premium may create significant financial exposure after a loss.
Pro Tip:
Federally backed loans for unit owners will require special form coverage regardless of the requirements in the governing documents. Using other forms can affect your community’s resale opportunities.
The Bottom Line
Basic and Broad forms cover only what is listed. Special Form coverage protects against everything except what is excluded. For most condo associations and HOAs, Special Form coverage provides the most comprehensive and reliable protection.