Vermont guide
Vermont insurance risk
Insurance is the most consequential risk in Vermont condo documents, and the gap is specific: flood. Under 27A V.S.A.
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§3-113, an association must carry property insurance on the common elements at not less than 80 percent of actual cash value, plus 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 damage, and with 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 backstop, and the Department of Financial Regulation warned in January 2025 that premiums are rising.
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 at not less than 80 percent of actual cash value at purchase and each renewal, plus commercial general liability coverage. The policy should include a waiver of subrogation against owners, a provision that an owner's act will not void the policy, and primary coverage where owner policies overlap. Flood and earthquake are not required — the single most consequential gap in Vermont.
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. Confirm whether the association carries flood coverage and whether the building, parking, or mechanicals flooded in 2023 or 2024.
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. The DFR's January 2025 advisory warned that homeowner premiums are rising on catastrophic weather, inflation, and building costs, and master deductibles are following. Read the carrier, placement, and any premium spike, and note that a master deductible above roughly 5 percent of replacement cost can impair conventional and FHA condo financing.
What it means for your HO-6
Because master deductibles are rising and flood is excluded, your individual HO-6 matters more in Vermont. Pay attention to loss-assessment coverage, which pays your share when the association passes a deductible or uncovered loss to owners — 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.
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
- Confirm whether the association carries NFIP or private flood coverage
- Ask whether the building, parking, or mechanicals flooded in 2023 or 2024
- 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
- Review the policy for the §3-113 waiver-of-subrogation and owner-liability provisions
- Note any premium spike against the DFR January 2025 advisory context
- Review your own HO-6 loss-assessment limit against the master deductible
- Price individual flood coverage for river-valley or low-lying buildings
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Related risk areas
Read these next to round out your due diligence
Special assessments
Special assessments are the single largest source of financial surprise in condo and HOA ownership.
Reserve studies
A reserve study tells you what the association expects to spend on long-term capital repairs and replacements, and whether it is funding those obligations adequately.
Condo document review
A condo document review is the structured analysis of every disclosure document your seller or association has provided — declaration, bylaws, rules, reserve study, budgets, financials, meeting minutes, insurance summary, estoppel or resale certificate, and any pending special assessment notices.
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Free, structured read of what's actually behind a fee change, an insurance renewal, or a pending assessment — 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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