Hollywood Living
Tenancy in Common (TIC) properties offer affordability and flexibility in California’s high-cost housing market, especially when structured as SACO TICs with clearly defined usage rights. But unlike condos or single-family homes, TIC ownership introduces a layer of complexity when it comes to insurance.
Because multiple parties share ownership of a single undivided property, insurance must protect both individual interests and shared assets. And unlike HOAs in condo developments, TIC groups are usually self-governed—making coverage decisions and risk management even more critical.
This guide breaks down everything buyers and agents need to know about TIC insurance: what’s covered, what’s not, and how to make sure your property (and peace of mind) are fully protected.
In a condominium, the HOA typically provides a master insurance policy that covers the building’s structure and common areas, while unit owners purchase separate HO-6 policies for their interiors and belongings.
In a TIC, there’s no HOA—only a private TIC agreement. As a result, insurance responsibilities are decentralized:
TIC group purchases a master policy for the entire structure
Each owner buys individual coverage for their unit’s interior and personal property
This hybrid approach makes it essential for all owners to coordinate and avoid coverage gaps.
Covers the structure as a whole, including:
Exterior walls, roof, and foundation
Shared systems (e.g., plumbing, electrical, HVAC if shared)
Liability for common areas (e.g., shared driveway, porch)
Damage caused by covered perils (fire, wind, vandalism, etc.)
Paid for by: All co-owners, based on the ownership share or as outlined in the TIC agreement.
Each TIC owner should have their own policy for:
Personal belongings (furniture, electronics, clothing)
Interior upgrades and improvements (flooring, cabinets, lighting)
Loss of use if the unit becomes uninhabitable
Liability coverage inside the assigned unit
Paid for by: The individual TIC owner.
This mirrors condo ownership in practice—but without an HOA to enforce requirements, individual responsibility is crucial.
Protects against large claims that exceed liability limits on individual or master policies, especially useful if:
The property has multiple units with shared outdoor areas
The location presents risk (e.g., hillside, pool, stairs)
Advised for: Higher-income buyers, TICs with 3+ units, or properties with regular visitor traffic.
Area |
Coverage Type |
Policy Responsible |
Roof and exterior walls |
Structural damage from fire, wind, vandalism |
Master policy |
Shared stairwells or walkways |
Liability and repairs |
Master policy |
Interior finishes (flooring, cabinets) |
Water damage, fire, theft |
Individual HO-6 |
Owner belongings |
Theft, fire, certain natural events |
Individual HO-6 |
Shared systems (plumbing, electrical) |
System failures, accidents |
Master policy (or shared responsibility) |
Temporary housing (e.g., fire recovery) |
Loss of use |
Individual HO-6 |
Legal disputes or lawsuits |
Injury liability, third-party claims |
Master policy or umbrella coverage |
Earthquake Damage
Most standard policies exclude earthquake coverage, even in California. For hillside homes or older structures, this is a significant risk.
Solution: Purchase an additional earthquake policy or ensure the master policy includes it.
Flooding and Landslides
TICs located in hillside zones (like the Hollywood Hills) or near canyons may be exposed to runoff and erosion.
Solution: Purchase flood insurance and/or consider slope stability assessments.
Negligent Co-Owner Behavior
If another co-owner causes damage—like a fire from an unattended stove—standard policies may not always cover your loss or displacement.
Solution: Ensure individual HO-6 policies include loss assessment coverage and confirm that the TIC agreement outlines financial responsibility in shared incidents.
Disputes Over Shared Repairs
When shared components (e.g., roof, foundation) are damaged but there’s no reserve or group consensus to fix them quickly, it can delay your claim or repairs.
Solution: A clear TIC agreement, proactive budgeting, and reserve planning prevent these issues.
To protect everyone, TIC groups should:
Agree on a shared broker or agency familiar with TICs
Ensure the master policy meets lender requirements for fractional loans
Require each co-owner to provide proof of HO-6 coverage annually
Document all policies and coverage levels in the TIC agreement or addendum
Tip: Have one owner act as the “insurance coordinator” to manage renewals, gather documents, and serve as liaison with the insurance provider.
Fractional lenders typically expect:
Master policy coverage of at least 80% of full rebuild cost
Named insureds to include all co-owners and lienholders
Standard perils (fire, smoke, water damage, liability)
HO-6 policies with minimum personal liability (often $300k–500k)
Buyers should coordinate early in escrow to avoid delays or surprises during underwriting.
Buyers should:
Review all insurance policies during due diligence
Confirm policy limits are adequate
Budget for both master and individual premiums
Request insurance certificates from the TIC seller or coordinator
Agents should:
Recommend an insurance broker who specializes in TICs
Help buyers understand what their lender requires
Flag properties in high-risk zones (fire, earthquake, flood
OLIVER THORNTON
CO-CEO AND R.E AGENT | HOLLYWOOD ESTATES
PARTNER | THORNTON DEVELOPMENT GROUP
310.704.1794
[email protected]
DRE# 01969227
Stay up to date on the latest real estate trends.
Hollywood Living
Timing matters when selling a TIC unit in LA. Discover the best seasons and market conditions to list your Tenants in Common property for top dollar.
Hollywood Living
Learn how property taxes work in TICs, including how shares are assessed, billed, and paid by co-owners in California.
Hollywood Living
Buying a TIC unit? Learn what TIC insurance covers (and what it doesn’t) so you can protect your home and finances.
Hollywood Living
A luxury buyer’s guide to Tenants in Common in LA’s iconic hillside neighborhoods
Hollywood Living
Break down the most important sections of a Tenants in Common agreement
Hollywood Living
Before buying a TIC unit in California, ask these 10 critical questions. This guide helps you avoid costly mistakes and buy with confidence.
Hollywood Living
In the ever-evolving world of real estate, one trend has emerged with clarity: your next homebuyer is likely discovering your property on their smartphone. In a digita… Read more
Hollywood Living
In the world of luxury real estate, presentation isn’t just important—it’s everything. And in 2025, nothing presents a property more powerfully than video. From cinema… Read more
Hollywood Living
In the high-stakes world of luxury real estate, few places demand more from sellers than the Hollywood Hills. With its mix of legacy estates, modern new builds, and bu… Read more
Our agents are experienced with buying and selling properties in the Hollywood Hills and beyond. Consult with us today!