1) Why this question matters

In a condominium, “the building” is not owned the same way a stand-alone house is. A unit owner typically owns a defined condominium unit (a registrable real property interest evidenced by a Condominium Certificate of Title or similar title) plus an undivided interest in the common areas, while day-to-day control and maintenance of common areas is usually lodged in the condominium corporation (or, in some projects, another management body authorized by the master deed and by-laws). Because insurance follows insurable interest and allocation of maintenance/common expenses, the answer to “who pays” depends on (a) what property is being insured, and (b) what the project documents require.

The practical reality in Philippine condominiums is a two-layer insurance structure:

Condominium corporation: buys and pays (through assessments) for a master policy covering the building and common areas.
Unit owner: buys and pays for unit-level coverage (contents, improvements, personal liability, and gaps like loss assessments).

That said, the “who pays” rule is ultimately anchored in the Condominium Act (R.A. 4726), the Insurance Code (as amended) (on insurable interest and indemnity), and—most importantly—the master deed, declaration of restrictions, and by-laws of the condominium project.

2) The legal architecture: how condominium ownership works

2.1 The condominium unit vs. common areas

Under Philippine condominium law and practice:

A condominium unit is separately owned and titled.
Common areas (lobbies, hallways, structural components, exterior walls, roofs, foundations, amenities, mechanical/electrical rooms, elevators, etc.) are owned in undivided shares by all unit owners, proportionate to their stated interest in the project.
The unit owner’s percentage interest commonly drives:
- voting rights in the condominium corporation, and
- allocation of common expenses.

2.2 The condominium corporation’s role

A condominium corporation (often a non-stock corporation) exists to hold and manage the common areas and to collect assessments (condo dues) to fund common expenses. Even when a separate property manager runs operations, the legal responsibility and authority typically traces back to the corporation and the governing documents.

3) Insurance basics that control the allocation

3.1 Insurable interest: who may insure what

Philippine insurance law requires insurable interest in the property insured:

A unit owner has insurable interest in:
- the unit itself, and
- the owner’s proportionate interest in common areas (even though that interest is undivided).
The condominium corporation has insurable interest in:
- the common areas it administers, and
- in practice, the building’s structural components and shared systems, because it is charged with preserving and restoring them for the benefit of all owners.
A mortgagee bank has insurable interest to the extent of the loan exposure and usually requires a mortgagee clause/loss payee designation.
A tenant may have insurable interest in contents and sometimes improvements they paid for, depending on lease terms.

Key point: Multiple parties can have insurable interest in the same property. The bigger question is not “who can,” but “who is obliged, and who pays,” which is primarily set by condominium documents and the allocation of common expenses.

3.2 Insurance is indemnity (no double profit)

Property insurance is generally indemnity—designed to restore the insured, not to let anyone profit. Where coverages overlap (master policy + unit policy), insurers typically coordinate benefits, apply policy conditions, and may pursue subrogation against liable parties.

4) What “building insurance” usually means in a condominium

“Building insurance” can be used loosely. In condominiums, it usually refers to coverage for:

the building structure (walls, roof, foundation, main systems),
common areas and shared facilities,
building equipment (elevators, generators, pumps) depending on policy scope,
perils like fire and “allied perils” (e.g., lightning, explosion) and sometimes typhoon/windstorm, flood, earthquake, subject to endorsements and exclusions.

It usually does not automatically include:

the unit owner’s personal property (furniture, gadgets, clothing),
the unit owner’s personal liability,
unit-specific renovations/improvements, depending on the master policy design,
loss of rent/business interruption for a unit owner,
damage caused by the unit owner’s contractor during renovation (which is typically handled by contractor insurance and unit owner liability arrangements).

5) The default allocation: condominium corporation pays for the master building policy (through common expenses)

5.1 Why the condominium corporation typically procures the master policy

In most Philippine condominium setups, the master deed/by-laws treat the following as common expenses:

security, utilities for common areas, housekeeping for common areas,
repairs and maintenance of common areas,
professional fees (property management, accounting, audit),
and insurance for the building and common areas.

Because the corporation administers common areas and has to respond to building-wide risks, it is usually the natural policyholder for the master building policy.

5.2 How unit owners pay for it

Unit owners “pay” for the corporation’s master policy indirectly through:

monthly dues/assessments (regular common expenses), and/or
special assessments (for extraordinary premiums, higher deductibles, uninsured losses, or mandated upgrades in coverage).

Allocation is normally proportionate to each unit’s percentage interest (as stated in the master deed/condominium documents), unless the documents lawfully provide a different allocation for specific expense categories.

5.3 Can a unit owner refuse to pay the “insurance” part of condo dues?

If the master deed/by-laws validly include building insurance as a common expense and it was properly assessed, non-payment is generally treated like non-payment of dues—subject to:

interest/penalties authorized by documents,
collection actions, and
restrictions on certain privileges (as allowed by the governing documents and due process requirements).

6) What the unit owner typically pays for (separate from condo dues)

Even with a robust master policy, unit owners typically should maintain unit-level coverage. In Philippine market practice, this is often purchased as a “condominium unit insurance” or packaged property policy rather than being called “HO-6,” but the concepts are similar.

6.1 Contents (personal property)

Covers movable items inside the unit:

appliances (if not built-in/common system),
furniture, electronics,
clothing and personal effects.

6.2 Improvements / betterments / renovations

A frequent gap: the master policy might cover only a baseline (“bare”) specification, while a unit owner may have:

upgraded flooring,
cabinetry,
partitioning,
built-in fixtures,
custom electrical/lighting, etc.

If the master policy is “bare walls” (common in some projects), these may be excluded, making unit owner insurance essential.

6.3 Personal liability (third-party liability)

Covers claims if someone is injured or property is damaged due to the unit owner’s negligence within the unit (e.g., a guest slip, a water leak from a washing machine line, an appliance fire that spreads). This is distinct from the condominium corporation’s public liability for common areas.

6.4 Loss assessment coverage (important but often overlooked)

If the condominium corporation suffers a loss that is:

below the master policy deductible,
excluded by the master policy,
underinsured (sum insured too low),
subject to co-insurance penalties, the corporation may levy a special assessment on unit owners. “Loss assessment” coverage helps a unit owner fund their share of that assessment.

6.5 Landlord coverage (if the unit is leased)

If a unit is rented out, the owner may need:

loss of rent coverage,
landlord liability,
coverage for owner-provided furnishings.

Tenants should have their own contents coverage.

7) Master policy designs: the “bare walls vs. all-in” problem

A huge portion of disputes about “who should pay” is really about what the master policy covers.

7.1 “Bare walls” (or “shell”) master policy

Typically covers:

structural elements and original fixtures forming part of the building,
common systems and common areas, but not:
unit owner improvements,
unit owner contents.

Effect: unit owners must insure improvements and contents.

7.2 “Single-entity” / “original specs” approach

Covers:

the unit as originally delivered by the developer (baseline finish), but not:
post-turnover upgrades and betterments.

Effect: unit owner still insures upgrades/renovations and contents.

7.3 “All-in” master policy (less common; more expensive)

Covers:

broader unit fixtures, sometimes including certain betterments, but still usually not:
personal property,
personal liability.

Effect: unit owner may still need a unit policy, but perhaps with reduced property limits (still strongly recommended for liability and contents).

Practical takeaway: A unit owner should request (through the corporation/property management) a summary of coverage (often a certificate or insurance summary) showing:

perils covered,
deductibles,
exclusions,
whether units are “bare” or include standard fixtures,
claim process and insured party.

8) Who pays deductibles and uninsured portions?

This is a major flashpoint and is commonly document-driven.

8.1 Deductible allocation models

Condominium documents commonly do one (or a hybrid) of the following:

Common expense model: deductible is paid by the corporation and charged to all owners as a common expense (especially for building-wide events).
Causer-pays model (fault-based): if loss originates from a particular unit due to negligence or prohibited acts, the responsible unit owner bears the deductible and/or uninsured amount, and the corporation may charge it back.
Origin-unit model (regardless of negligence): some rules allocate responsibility to the unit where the incident originated, even without proven negligence (more controversial, but sometimes adopted as a risk-control measure).

8.2 Uninsured losses and underinsurance

If the corporation’s coverage is insufficient, it may levy special assessments. This is where unit owner “loss assessment” coverage can be decisive.

9) Common scenarios and who typically pays

Scenario A: Fire starts inside Unit 1208 and damages the corridor ceiling and neighboring units

Building/common areas (corridor ceiling, structural elements): usually master policy → paid via corporation’s claim.
Owner’s contents in Unit 1208: unit owner’s policy (if any).
Neighbor’s damaged contents: neighbor’s unit policy.
Liability: if Unit 1208 owner was negligent (e.g., unattended cooking, illegal wiring), injured parties or other insurers may pursue that owner; their personal liability coverage (if any) responds.
Deductible: depends on condo rules (common expense vs chargeback).

Scenario B: Water leak from Unit 1502 damages Unit 1402 ceiling and common hallway

Common hallway and building components: master policy if covered.
Unit 1402 improvements/contents: Unit 1402’s policy.
Liability: if leak due to negligence (e.g., defective owner-installed bidet line), Unit 1502’s liability coverage is critical.
Subrogation: master insurer may subrogate against the negligent party.

Scenario C: Typhoon damages building façade and amenity roof

Structure/common areas: master policy only if typhoon/windstorm is included; otherwise, corporation special assessment is likely.
Unit interior water intrusion: depends on master policy scope and whether the damage is considered common element failure vs unit-level fixture.
Windows and balcony doors: allocation depends heavily on whether these are classified as part of common elements, limited common elements, or part of the unit in the project documents.

Scenario D: Earthquake causes structural cracks and elevator damage

Master policy responds only if earthquake endorsement exists (often a separate premium and deductible).
If not insured, restoration is typically funded through special assessments and reserves.

Scenario E: Theft of jewelry and laptop inside the unit

Usually not a master policy claim.
Unit owner/tenant contents policy responds (subject to limits and proof requirements).

10) Mortgage and bank requirements (practical driver of “who pays”)

Banks commonly require insurance as a loan condition. In condominium loans:

A bank may accept the corporation’s master policy if it is adequate and the bank’s interest is properly noted (this depends on bank policy and documentation).
Many banks still require the borrower to obtain separate insurance (or endorsements) to ensure the lender is protected.
If the bank insists on separate coverage, that is the unit owner’s cost—even if the corporation already has a master policy. This can produce “double insurance” in premiums, but claims still follow indemnity principles and policy terms.

11) Governance: where the rules are found (and why they control)

When disputes arise, the first question is: What do the condominium documents say? Key documents typically include:

Master Deed (and its attachments, such as project plan and unit boundaries)
Declaration of Restrictions
By-laws of the condominium corporation
House rules / policies (to the extent consistent with higher-ranking documents)
Turnover/management agreements (especially in early years)

These documents usually specify:

what counts as common expense,
the corporation’s power/obligation to insure,
insurance minimums and permitted insurers,
owner obligations (e.g., to maintain insurance, to secure renovation permits, to hold the corporation harmless),
claims handling procedures,
allocation of deductibles and chargebacks.

Because these documents are typically annotated on titles and binding on owners, they are the operative “law” inside the project—so long as they remain consistent with statutes and public policy.

12) Claims handling: who files, who receives proceeds, who decides repairs

12.1 Master policy claims

Typically:

The condominium corporation (or authorized property manager) files the claim for common areas/building components.
Proceeds are generally applied to repair/restoration of insured property.
Contractors, board approvals, and procurement rules may be required by by-laws and internal policies.

12.2 Unit policy claims

The unit owner (or tenant, for their contents) files their own claim.

If both master and unit policies are triggered, insurers coordinate on scope (what is common element vs unit property vs betterments).

12.3 Who controls the repair decision?

For common areas: the corporation, acting through its board and procurement rules. For unit interiors: the unit owner—subject to renovation rules, permits, and building safety requirements.

13) Dispute patterns and legal remedies (Philippine setting)

Typical disputes include:

owner challenges inclusion of insurance premium in dues,
disagreement on whether an item is a common area vs part of the unit,
chargeback of deductibles to a particular unit,
refusal to release repair funds for unit components,
allegations of inadequate insurance procurement by the board.

Remedies depend on the nature of the controversy:

Internal condominium corporation/member disputes (often “intra-corporate” in nature) are typically handled through appropriate court processes for corporate controversies.
Developer/buyer issues (especially pre-turnover or arising from sale/marketing representations) may fall under housing/real estate regulatory dispute mechanisms.
Tort/damage claims between neighbors (e.g., negligence causing water damage) are usually civil claims, sometimes preceded by barangay conciliation depending on parties and rules.

Because forum and procedure can be outcome-determinative, the classification of the dispute matters as much as the merits.

14) Practical compliance checklist

For unit owners

Get a copy of the insurance summary of the master policy (perils, deductibles, exclusions, “bare walls vs all-in”).
Buy unit coverage for:
- contents,
- betterments/improvements,
- personal liability,
- loss assessment,
- and (if leased) loss of rent/landlord liability.
If renovating: require contractor to carry proper insurance, and align with condo renovation rules.

For condominium corporations/boards

Maintain adequate master coverage for:
- property (building/common areas),
- public/general liability,
- fidelity/crime coverage for funds handling,
- directors & officers (often prudent),
- equipment breakdown where appropriate (elevators/generators), depending on risk appetite and budget.
Clearly publish:
- what the master policy covers,
- deductible allocation rules,
- incident reporting and claims procedures,
- chargeback policy and due process steps.

15) Bottom line

In Philippine condominiums, building insurance is ordinarily the condominium corporation’s responsibility to procure, and unit owners pay for it through common expense assessments in proportion to their condominium interest—because the insured property (structure and common areas) is collectively owned and administratively controlled.

Meanwhile, unit owners remain responsible for insuring what the master policy typically does not fully protect: personal property, unit improvements/betterments, personal liability, and the risk of special assessments arising from deductibles, exclusions, or underinsurance.

Where the line is drawn in any specific project is ultimately determined by the master deed, declaration of restrictions, and by-laws, interpreted alongside insurable interest and indemnity principles under Philippine insurance law.