A pipe lets go in the unit above yours on a Thursday night. By Saturday the drywall is out, the kitchen cabinets are ruined and the flooring is buckled. Who pays for what is decided entirely by a paragraph in a document most buyers never open.
Most people assume Virginia law settles it. It does not, and the way it does not is worth understanding before you buy.
The thing almost everyone gets wrong
Section 55.1-1963 of the Virginia Condominium Act is titled simply Insurance. Read subsection A closely and the operative words are that the condominium instruments may require the association to obtain a master casualty policy affording fire and extended coverage in an amount consonant with the full replacement value of the structures, and a master liability policy.
May require. The statute is permissive. The obligation to insure your building comes from your declaration and bylaws, not from the Code of Virginia. That is why two condominiums a mile apart in Manchester can have completely different answers to the same burst-pipe question, and why reading the Condominium Act alone will not tell you what you are covered for.
What the Code does require
One thing, and it is not what buyers expect. Under subsection B, any unit owners association collecting assessments for common expenses shall obtain and maintain a blanket fidelity bond or employee dishonesty insurance policy, insuring the association against losses from theft or dishonesty by its officers, directors or employees, or by a common interest community manager or that manager’s employees.
The amount is specified: the lesser of $1 million or the association’s reserve balances plus one quarter of its aggregate annual assessment, with a minimum of $10,000. So the single insurance requirement Virginia imposes on your condo association is protection against somebody walking off with the money, not protection against the building burning down. Once you know that, the reserve study and the fidelity bond amount become two numbers worth looking at together, which is also why special assessments tend to arrive in pairs with insurance problems.
Subsection C adds a duty that gets ignored: when a policy is obtained, changed or terminated, written notice must promptly go to every unit owner, delivered the same way notices of association meetings are, under § 55.1-1949. If you have owned for years and never received one, ask why.
Bare walls, all-in, and where your unit legally stops
Master policies broadly come in two shapes. A bare walls policy insures the structure to the unfinished interior surfaces: studs, subfloor, the building envelope. Everything inward of that line is yours. An all-in or single-entity policy also covers the original fixtures, cabinets, flooring and appliances as originally installed, leaving you responsible for upgrades and contents.
Which one applies is not a question for your insurance agent. It is determined by how your declaration defines the boundary of a unit, and that language varies enormously across Richmond’s stock, from converted tobacco warehouses in Scott’s Addition to purpose-built mid-rises elsewhere in the City of Richmond. Find the boundary clause, read it, and then read the master policy against it. The two are supposed to meet. Sometimes they do not, and the space between them is your exposure.
Send us the two documents and we will read the gap with you
If you are under contract on a Richmond-area condo, email us the resale certificate and the master policy certificate of insurance. We will pull out the unit boundary clause, the per-occurrence deductible and the fidelity bond amount and tell you in plain English what your HO-6 needs to cover, before your contingency expires. That is a free read, and it takes us about twenty minutes. Send them here.
The deductible is the number that actually bites
Master policy deductibles on Richmond-area associations are frequently five figures per occurrence. That matters because many declarations and board resolutions allow the association to charge the deductible back to the owner of the unit where the loss started. A $25,000 deductible and a burst supply line under your sink is a $25,000 conversation, not a phone call to the management company.
This is what loss assessment coverage on your HO-6 is for, and it is routinely bought at a limit set years ago for a building whose deductible has since tripled. Check the limit against the actual deductible. The Virginia State Corporation Commission Bureau of Insurance is the regulator for property insurers writing in Virginia and publishes consumer guidance on residential policies. Our companion piece on how Richmond homeowners insurance is priced covers what moves the premium on your side of the line.
A townhome in an HOA is a completely different animal
This is the mix-up we correct most often. If your townhome is governed by a property owners association rather than a condominium declaration, you are under the Virginia Property Owners’ Association Act, and that chapter contains no insurance section at all. There is no statutory master policy, and no fidelity bond requirement equivalent to the condominium provision.
In practice that usually means you own your lot and your structure and you insure it with an ordinary homeowners policy, while the association insures common area and carries liability cover. Plenty of Richmond-area attached housing in West Broad Village and across Chesterfield County is structured exactly this way despite looking identical to a condominium from the street. Our post on Virginia HOA disclosure packets covers what you receive in that regime, and the condominium resale certificate covers the other one.
What Richmond attached housing is doing right now
Closed condominium and townhouse sales, August 2026
| Area | Median sold price | Year over year | Days on market | Months of supply |
|---|---|---|---|---|
| Richmond Metro | $379,370 | up 3.9% | 46 | 2.9 |
| Richmond City | $355,000 | up 16.4% | 45 | 3.2 |
| Henrico County | $380,017 | up 5.6% | 36 | 2.2 |
| Chesterfield County | $391,590 | up 3.9% | 57 | 3.5 |
| Hanover County | $349,000 | down 6.6% | 54 | 3.7 |
| Median price per square foot | [DATA NEEDED: median price per square foot, August 2026, by area] | |||
Closed condominium and townhouse sales, August 2026, from Central Virginia Regional MLS, published in the Richmond Association of REALTORS housing reports, current as of 10 September 2026. These are area-wide medians covering condominiums and townhouses together, not figures for any one building. Goochland recorded a single attached sale in August and Powhatan recorded none, so neither supports a median and neither is shown.
Note the days on market. Attached homes across the metro took 46 days against 22 for detached, and Chesterfield attached took 57. A building with an unresolved insurance or reserve problem sits inside those numbers, and it is one of the reasons a slow attached listing is worth investigating rather than dismissing. Financing is the other; we covered that in why some Richmond condo buildings cannot be financed. If you want to see what is sitting on the market at the moment, our property search and active listings are the place to start.
The five documents to get before your contingency expires
The declaration section defining unit boundaries. The current certificate of insurance for the master policy. The per-occurrence deductible, in writing. The fidelity bond amount. The most recent reserve study. Any competent management company produces those in a day, and if yours cannot, you have learned something. Then take the first two to your insurance agent and buy the HO-6 that fits the gap, rather than the one the lender minimum implies.
This is general information, not legal advice. Condominium declarations and association resolutions vary, and insurance coverage questions turn on their exact wording. For advice on a specific building or a specific claim, talk to a Virginia real estate attorney.
Questions we are getting about this one
Does Virginia law require my condo association to carry insurance on the building?
Not by itself. Section 55.1-1963 of the Virginia Condominium Act says the condominium instruments may require the association to obtain a master casualty policy and a master liability policy. The obligation comes from your declaration and bylaws, so those are the documents to read, not the Code.
What insurance does Virginia actually mandate for a condo association?
A blanket fidelity bond or employee dishonesty policy. Any unit owners association collecting assessments must maintain one covering theft or dishonesty by officers, directors, employees or the community manager, in an amount equal to the lesser of $1 million or the reserve balances plus one quarter of the aggregate annual assessment, with a floor of $10,000.
What is a bare walls policy?
A master policy that insures the building structure only up to the unfinished interior surfaces. Everything inward of that, drywall finish, cabinets, flooring, fixtures and appliances, is yours to insure. The alternative, often called all-in or single entity, covers those original components too. The declaration decides which one you have.
What is loss assessment coverage and do I need it?
It is the part of an HO-6 that pays your share when the association assesses unit owners for an uninsured loss or for the master policy deductible. It is usually cheap and frequently set too low. If your association carries a $25,000 deductible, a $1,000 loss assessment limit is not doing much.
Who pays the master policy deductible?
It depends on the declaration and the association resolution. Many associations charge the deductible back to the owner of the unit where the loss originated, which is precisely the exposure loss assessment coverage exists to cover. Ask for the current deductible amount in writing before you remove your contingency.
Is a townhome in an HOA the same as a condo for insurance?
No, and this is the most common mix-up in the Richmond market. Most Richmond-area townhomes and single-family HOAs are governed by the Property Owners Association Act, which contains no insurance section at all. In those communities you normally insure your own structure with an ordinary homeowners policy and the association insures common area.
How do I find out which regime my property is under?
The recorded documents say so. A condominium has a declaration recorded under the Condominium Act and the unit is defined by boundaries described in that declaration; a property owners association has a declaration of covenants and you own the lot and the structure. If the listing is ambiguous, the resale certificate or disclosure packet will settle it.
Should the association tell me when the policy changes?
Yes. Section 55.1-1963 requires written notice to every unit owner when a policy is obtained and when it is changed or terminated, sent the same way meeting notices go out. If you have owned a unit for three years and never seen one, that is worth a question to the board.
What should I ask for before my contingency expires?
The declaration section defining unit boundaries, the current certificate of insurance for the master policy, the per-occurrence deductible, the fidelity bond amount, and the most recent reserve study. Five documents, and any competent management company can produce them.
We will read your condo documents before you waive the contingency
Send us the resale certificate and the master policy certificate and we will mark up the unit boundary clause, the deductible and the fidelity bond amount for you. It is the cheapest hour in the transaction and it is on us. Send the documents, or talk to the agent who handles our condo files.
