Condominium owners are presented with a unique situation when it comes to insuring their home. Part of the coverage is provided from a policy purchased by the Condominium Association called a Master Policy. The Condominium Association’s By-laws and Master Deed spell out specific guidelines that must be followed when obtaining this coverage.
Owners should also purchase an individual Unit Owners Policy (FORM HO-6). These policies are similar to traditional homeowner policies but have been tailored to meet the needs of a condominium unit owner. The policy works in conjunction with the Master Policy to provide a full package of coverage.
The principle element of the Unit Owners policy is coverage for the owner’s Personal Property (Coverage C). The limit that you choose should accurately reflect the total value of all of your personal belongings.
Another major element is coverage for the Building (Coverage A). This is less straightforward because the amount of coverage that you actually need depends on the Condominium Association’s Bylaws. The Bylaws indicate the exact coverage that is to be provided by the Association’s Master Policy, so the unit owner must review them in order to make the right decision for coverage. It’s also very important to understand how any improvements that are made to your unit will be covered.
Bylaws (and therefore, the way a Master Policy will respond to a claim) can vary greatly from one association to another. Because each is different, we strongly suggest that you carefully review the part of your Association’s Bylaws relating to insurance and discuss it with us. The Association could have a claim under the Master Policy that turns out to be underinsured. In these cases, individual unit owners can be assessed for their proportionate share. We recommend adding Loss Assessment coverage to help with this kind of expense if it should come up. It is important to note that assessments for maintenance and upkeep of the property are not covered by insurance.
Condominium polices also provide coverage for Personal Liability and Medical Payments. In addition, popular options such as special coverage for valuable articles like jewelry can easily be included.
Call us to discuss the right coverage and limits for your situation.
Condominium and Community Associations
For information about a Master Policy for the Condominium Association, click here.