Vermont guide
Vermont condo insurance requirements
Insurance is the most consequential risk in a Vermont condo purchase, and the gap is specific: flood. Under 27A V.S.A.
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§3-113, an association must maintain, to the extent reasonably available, property insurance on the common elements at not less than 80 percent of actual cash value at purchase and each renewal, plus commercial general liability coverage — but flood is not required, and standard master and HO-6 policies exclude it. After the 2023 and 2024 floods, which caused close to a billion dollars in combined damage, and with roughly 35 to 40 percent of 2023 claims outside the mapped flood zone, confirming flood coverage is the most important insurance check in Vermont. Layered on top: the state has no FAIR Plan or insurer of last resort, and the Department of Financial Regulation warned in January 2025 that premiums are rising on catastrophic weather, inflation, and building costs.
What §3-113 requires — and what it doesn't
Section 3-113 requires the association to maintain, to the extent reasonably available, property insurance on the common elements (and association-owned property in a planned community) against risks of direct physical loss commonly insured against, in an amount not less than 80 percent of actual cash value at purchase and each renewal, plus commercial general liability coverage in an amount set by the board but not less than any figure in the declaration. The policy provisions must extend liability coverage to each unit owner for their interest in the common elements, include a waiver of subrogation against owners and household members, provide that an individual owner's act or omission will not void the policy, and make the association's policy primary where owner coverage overlaps. Flood and earthquake are not required — the single most consequential gap in Vermont. Coverage below the 80-percent-ACV floor is a statutory red flag, and a master policy missing the subrogation-waiver and owner-liability provisions is a drafting red flag worth raising.
The flood-coverage gap
Vermont has among the lowest flood-insurance uptake in the country, and many associations and owners carry none. Standard master and HO-6 policies exclude flood; NFIP or private flood coverage must be bought separately. Crucially, roughly 35 to 40 percent of 2023 claims were on properties outside the mapped Special Flood Hazard Area, so "not in the flood zone" does not mean safe — the maps systematically understate real exposure. The stakes are quantifiable: in 2023, average FEMA individual assistance ran about $16,000 against an average NFIP claim near $71,000, so uninsured owners absorbed catastrophic losses. Confirm whether the association carries flood coverage, ask whether the building, parking, or mechanicals flooded in 2023 or 2024, and check the Vermont Flood Ready Atlas and the building's river-corridor status, because the Flood Safety Act's river-corridor permitting (beginning January 1, 2028) and FEMA's statewide flood-map overhaul can change a building's future repair rights and insurance cost.
No FAIR Plan, rising premiums, and surplus lines
Vermont has no state FAIR Plan or insurer of last resort. When standard carriers will not insure a flood-prone or aging building, coverage moves to the excess-and-surplus-lines market at higher cost — a structural vulnerability if carriers non-renew flood-exposed buildings. The DFR's January 2025 consumer advisory warned that homeowner premiums are rising on catastrophic weather, inflation, and building costs, and master-policy premiums and deductibles are following. Vermont's average homeowner premium remains comparatively low nationally, but the trend is sharply upward. Read the carrier, whether the placement is standard or surplus-lines, and any premium spike at renewal. A master policy that just jumped or moved into the surplus-lines market signals a stressed situation worth examining closely, because that cost reaches owners as higher dues, higher deductibles, or special assessments.
Deductibles, financing, and your own HO-6
As master premiums harden, deductibles rise — and a master property deductible above roughly 5 percent of replacement cost can impair conventional Fannie Mae or Freddie Mac and FHA condo financing. Read the master declarations page as a financing document, not just a risk document, and note any catastrophe-specific deductible. Then read your own HO-6 against it: because master deductibles are rising and flood is excluded, loss-assessment coverage on your HO-6 matters more in Vermont — it pays your share when the association passes a deductible or uncovered loss to owners, which is common after a flood or storm. For any river-valley or low-lying building, price individual flood coverage against the building's actual exposure rather than its flood-map designation, since the map can understate the risk.
Vermont legal references
- 27A V.S.A. §3-113 — Insurance (property at 80% ACV; liability; subrogation waiver)
- Vermont Department of Financial Regulation — Flood insurance & consumer advisories
- 27A V.S.A. §4-109 — Resale certificate (insurance disclosure §4-109(a)(8))
Informational only. Not legal advice. Always confirm against current statute and counsel.
Need help applying these Vermont statutes to your specific situation? We can connect you with state-licensed counsel and specialists familiar with this exact regulatory environment.
Find a Vermont specialist →Reviewer's checklist
- Confirm master property coverage meets the §3-113 80%-of-ACV floor plus liability
- Confirm whether the association carries NFIP or private flood coverage
- Ask whether the building, parking, or mechanicals flooded in 2023 or 2024
- Check the Flood Ready Atlas and river-corridor status (Flood Safety Act, 2028)
- Identify the carrier and whether coverage is standard or surplus-lines (no FAIR Plan in VT)
- Read the deductible structure and any catastrophe-specific deductible
- Check whether the master deductible could affect conventional or FHA financing (~5% threshold)
- Confirm the §3-113 subrogation-waiver and owner-liability provisions are present
- Note any premium spike against the DFR January 2025 advisory context
- Review your own HO-6 loss-assessment limit and price individual flood coverage where exposed
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Get My Free Risk Report →Source documents
- Declaration & bylawsthe rules
- Budget & financialsthe money
- Reserve studythe big repairs
- Meeting minuteswhat the board fears
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An assessment in the minutes but not the estoppel; a reserve the budget never funds.
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Guides for Vermont buyers and owners
Flooded Outside the Flood Zone: Vermont's Condo Insurance Gap After 2023 and 2024
Vermont does not require condo associations to carry flood insurance, standard master policies exclude it, and 35 to 40 percent of 2023 flood claims were outside the mapped flood zone. Here is how to check a building's flood exposure and coverage before you close.
The Complete Condo Master Insurance Guide (2026)
How master policies are structured, how percentage deductibles create owner exposure, what your HO-6 needs to cover, and what to verify before you close — across Florida, Texas, and Arizona.
Condo Master Insurance Red Flags: What to Check Before Closing
Master-policy gaps, large deductibles, exclusions, and loss assessments can become the buyer's problem after closing. Learn what each section of the master insurance certificate discloses — and the red flags to check before you close.
Should I Buy a Condo With a High Master Insurance Deductible?
A high master-policy deductible can reach you as a loss assessment. Learn what to check on the master policy and HO-6 — and get a free review.
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Reviewed by Kirk Hasley, Founder. Every claim here is checked against current Vermont statute and primary sources, using the same documented review framework we run on every file. Last reviewed June 13, 2026.
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A special assessment, an insurance non-renewal, a thin reserve study — find out whether it signals real risk, checked against your state's rules, with page citations you can verify. No cost, no obligation.
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We can connect you with insurance brokers, realtors, and mortgage brokers who can help you respond to what your documents reveal.
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