Which statement about the master insurance policy is true?

• A. It includes a group retention portion funded by member contributions
• B. It provides unlimited coverage
• C. It excludes all property transactions
• D. It is issued by the federal government

Answer: (A)

In a master insurance policy for a condo or strata, the important point is how the policy handles the deductible and who pays for it. A key feature is the group retention (often called a self-insured retention) portion, which is the amount the association keeps from the insurer’s coverage and is not paid by the insurer. This retention is funded by unit owners through their contributions—monthly fees or special assessments—taken into the condo corporation’s funds to cover that deductible. In other words, the ownership group shares the risk up to a set amount, with the insurer stepping in beyond that if a claim arises. This structure explains why the statement about a group retention portion funded by member contributions is true.

The other statements don’t fit how master policies typically work: coverage is not unlimited, since policies have limits and deductibles; it does not exclude all property transactions, and it’s not issued by the federal government but by private insurers.