Maryland Condo Deductible Law Changes Again
Maryland Condo Deductible Law Changes Again: What You Need to Know for 2025
Effective October 1, 2025, a Maryland condo deductible law takes effect that will increase the amount of loss assessment that a condo association can charge to their condo unit owners.
Prior to the law change, the maximum amount a condo association could charge for a loss assessment was $10,000 (from a change that was effective 10/1/2020). The new law increases that amount to $25,000.
So what does the increase mean to you, the condominium owner?
Well, after 2020, most condo insurance policies were written with the adjusted loss assessment coverage of $10,000. This was done to cover the owner for the maximum amount that the condo association could charge them for a deductible portion of a loss that originates in their condo unit.
Now that the amount the association can charge has been increased to $25,000 as of October 1, 2025, it could create a $15,000 gap in your condo insurance policy.
What Your Condo Association Must Tell You Under the New Law
The updated law also requires your condo board to notify you annually about the current deductible amount and your potential responsibility if a loss originates in your unit.
If you’re buying a condo after October 1, 2025, sellers must also include a written notice about the $25,000 deductible responsibility in the sales contract. This is a new requirement that protects buyers—but only if you’re paying attention.
What is a loss assessment?
You may be wondering what exactly is a loss assessment that would be covered on your condo policy. You’ve probably heard the term, but unless you have had an assessment, you may not understand what it is and how it can affect you.
If a loss originates inside of your condo unit and causes damage to the condominium structure, the association can charge you, the condo owner, an assessment to cover their deductible portion of their insurance policy, up to a $25,000 maximum as of October 1, 2025.
Here is an excerpt from the actual Maryland condo deductible law:
“If the cause of any damage to or destruction of any portion of the condominium originates from a unit, the owner of the unit where the cause of the damage or destruction originated is responsible for the council of unit owners’ property insurance deductible not to exceed $25,000.”
Any remaining deductible amount that may be owed by the association, becomes a common expense to the association.
The BIG confusing area of Loss Assessment Coverage:
Here’s an example that can be confusing to most people.
Example: A hurricane blows through Ocean City, Maryland and blows the roof off of your condo building. In this case, the master policy insurance deductible would be considered a common expense of the association. Let’s assume in this case that the association did not have enough money to cover the deductible. They could deliver an assessment to all of the condo unit owners to cover this expense.
Most people would naturally think that since the assessment was issued to cover the master policy deductible, then the loss assessment coverage on their condo insurance policy should cover it.
Well, that would not be correct with most condo insurance policies. Remember, that in order for the insurance to kick in, the loss must originate from the condo unit that is insured by the unit owner.
In this case, it did not. So therefore it is a common expense of the association. A common expense assessment is not covered under the standard condo insurance policy’s assessment coverage.
Insurance can be a bit confusing, so if you have any questions, feel free to reach out to one of our team members here at Huff Insurance at 410-647-1111.
Bottom Line
This law is a game-changer. The Maryland condo deductible cap will more than double—from $10,000 to $25,000—on October 1, 2025.
Why Choose Huff Insurance—and Why Use an Independent Agent?
At Huff Insurance, we don’t just sell policies—we help you stay ahead of major changes like this one. When laws shift, your protection shouldn’t fall behind. Our experienced agents will help you understand your risks and recommend affordable ways to cover new gaps—before they hit your wallet.
As an independent insurance agency, we work with multiple top-rated carriers. That means we can shop around to find a policy that covers your condo’s new deductible exposure—without breaking the bank. And if your condo association changes their master deductible again? We’ll help you adjust quickly.
Huff Insurance is a Trusted Choice Independent Insurance Agency. We are here to serve your needs.
FAQs: Maryland Condo Deductible Law Explained
1. What is the Maryland condo deductible law?
It’s part of Maryland Real Property Law (§11-114) and states that condo owners are responsible for the condo association’s insurance deductible—if the loss originates in their unit—up to a set cap. That cap rises to $25,000 on October 1, 2025.
2. What if my condo insurance only covers $10,000?
You may be at risk. If a covered loss originates in your unit and the deductible is $25,000, your policy would only pay $10,000—leaving you to cover the remaining $15,000 out of pocket. If it is available, you should upgrade your deductible coverage limit now.
3. Does this apply to all condo owners in Maryland?
Yes. Any condo governed by Maryland’s condominium laws falls under this regulation. If your unit causes damage, you may be liable for the deductible—even if it’s as high as $25,000.
4. What kind of coverage do I need?
Look for “loss assessment” or “building deductible” coverage on your HO-6 condo insurance policy. Ask your agent to ensure it covers at least $25,000.
5. Will my condo association notify me?
They’re required to provide annual notice of the deductible amount and your potential responsibility. But don’t rely solely on them—verify with your insurer as well.
