Building replacement cost or “coverage A” cost, is probably the most important, and most widely misunderstood concept when approaching the topic of HOA master policy. As per the dry definition, the replacement cost is the cost to replace the building to its original state after it was damaged by a peril such as, fire, water damage or wind/hail. However, to begin to understand it, we must first delve into what the HOA is actually responsible for insuring and what lies in the responsibility of each individual unit owner through their HO6 condominium owner policy. To do so, one should examine the HOA CC&R’s (Conevents, Conditions, & Restrictions) and determine where the condominium's unit owner insurance responsibility ends and the association’s responsibility begins. As an example, some associations require the HOA to insure the building walls-out, this means that the policy should cover the buildings shell, including the exterior walls, roof and everything inside the framing but not the inside of the units. For some HOAs this will extend to fixtures and unit betterments. As such the replacement cost should be a product of the extent of the coverage alongside the cost of labor and materials in the given city/state.