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House committee advances condo insurance change; amendment raises unit-owner deductible and adds resale notice
Summary
A bill addressing condominium property insurance deductibles was amended to require disclosure in resale packages and to raise a minimum deductible from $10,000 to $25,000; legislators said the change responds to insurers denying master policies when deductibles are too low.
ANNAPOLIS — Lawmakers in the Maryland House of Delegates considered and advanced legislation that would change how condominium master insurance deductibles are handled and require disclosure to prospective buyers.
During committee-floor discussion, the floor leader presented an amendment to House Bill 449 that requires notice in resale packages about unit-owner responsibility for property insurance deductibles when damage originates in a unit. The transcript records that the amendment clarifies that the unit owner—not a third party—bears responsibility for the master policy deductible when the damage originates in that owner’s unit.
A delegate from Birmingham asked whether the deductible applied to common areas or to individual units; the floor leader and other supporters clarified the deductible applies to unit owners when damage originates in their unit. The transcript shows the bill raises the deductible from $10,000 to $25,000. The floor leader said the increase would cost a unit owner roughly $7 to $10 per year in additional insurance cost and argued that insurers were increasingly denying coverage where deductibles remained at lower levels. "What is happening across Maryland and across The United States is that condominiums are being denied insurance period," the floor leader said.
Legislators also discussed whether unit owners could obtain supplemental private coverage to cover the higher deductible; the floor leader said yes and noted examples of associations with even higher deductibles.
The House adopted the committee amendment on the floor; the transcript records that the amendments were adopted and the bill was ordered printed for third reading.
The exchange underscores two points: the bill seeks to ensure buyers receive notice about potential financial responsibility for a large master-policy deductible, and sponsors contend the deductible increase is a market response to insurer conditions rather than a policy intended to shift major costs onto owners without alternatives.
No final third-reading vote on the bill was recorded in this transcript segment; the floor action at the time was adoption of the amendments and ordering the bill printed for third reading.
