Condo owners often wonder what their association’s insurance policy covers. They question what insurance they need to buy to ensure they remain fully protected. Will the association’s policy cover the inside of their unit, for example? Furthermore, how does the association’s policy differ from the condo owner’s insurance policy?
What Does the Condo Association’s Policy Cover?
In most cases, the association’s insurance policy protects common areas and shared buildings. Known as a master insurance policy, this insurance provides coverage for those areas multiple condo owners use. This might include a fitness center on the property, a swimming pool, and any walkways. However, if the damage exceeds the amount paid out by the insurance company when the association files a claim, the remaining balance may become the responsibility of the condo owners. To prevent costly bills in this situation, a condo owner might wish to purchase loss assessment coverage. Talk with Garrity Insurance about this additional layer of protection.
This policy should also offer liability protection. If someone is injured in a common area of the condo complex, the association’s insurance should help cover their legal or medical bills along with any bills incurred by the association because of this injury.
A condo association may wish to purchase additional coverage, and condo owners must know what insurance the association gets so they don’t purchase coverage when they already have protection in place. For example, a bare walls-in policy covers the roofing, wiring, and other structural components of each unit. However, it doesn’t cover interior features. In contrast, an all-in policy covers everything in the bare walls-in policy along with installations, fixtures, and appliances in each unit. Every condo owner must know how to read the policy to learn what it covers and excludes.
What is Condo Insurance?
Many condo owners choose to purchase condo insurance. This policy protects the condo owner in the event something goes wrong inside the unit they purchased. This includes smoke and fire damage, identity theft, accidental water damage, and theft. In addition, these policies may come with loss assessment coverage and loss of use protection.
Loss assessment coverage protects the condo owner if the association charges for unexpected assessments. Loss of coverage provides coverage if the owner cannot live in the unit for a period after a covered peril. Learn whether the policy covers liability in the event someone is hurt in the condo, as no owner wants to have a bill for an accident that happened in their unit.
One thing condo owners need to consider when purchasing a policy for their unit is the amount of coverage provided by the master policy. For instance, the master policy may only cover the original value of items within the unit. If the owner makes any upgrades or improvements, they need to ensure their personal policy will cover the full value of these alterations. Consider the actual cash value and replacement cost of these items to make certain you get the right protection.
It falls on each condo owner to know what the association’s master policy covers and what they remain responsible for. Furthermore, condo association board members need to share with unit owners what the master policy covers. Two-way communication remains essential to ensuring the property and protecting the owners and board members. When this communication remains ongoing, the relationship between the various parties strengthens.