Is personal condo policy coverage for damages or upgrades only?

We live in a condo in nj. We have a master insurance policy that is used for catastrophic events such as fire and hurricane. Our bylaws dictate We purchase our own personal insurance for our unit that we own. We had some water damage from an appliance and filed a claim with our personal insurance. They stated they would only pay for repairs for upgrades because the master policy should bring everything back to original sale condition. Our ass'n says the master policy doesn't apply to this. They provided our bylaws as reference. Unit Owners shall carry insurance for their own benefit insuring their carpeting, wallcovering, fixtures, air equipment, appliances, furniture, furnishings and other personal property, and insuring against public liability for personal inury or property damage.  All policies shall contain waivers of subrogation against the Board of Directors, the Association, and other Unit Owners.