Insurance Coverage under an individual condo owner’s policy includes:
- Personal Property (Contents) – Coverage can be provided for personal belongings such as clothing, furniture, appliances including coverage away from the unit.
- Personal Liability – $100,000 or more coverage for bodily injury, property damage and personal injury caused by you.
- Medical Payments – $1,000 or more coverage for others who may be injured in your unit.
- Unit Owners Real Property – Coverage for additions, fixtures, improvements and installations which are part of the building within your unit, including miscellaneous real property (building) for which you are responsible under the terms of your association agreement.
- Loss Assessment – $1,000 or more coverage for your share of any loss assessment charged against you during the policy period by the association.
Condominiums are different from homes and apartments. Thus insurance coverage is different from homeowner and tenants insurance policies. Condo owners own their condominium unit including the physical structure. Losses that damage more than one unit would be very hard to settle if every unit owner had separate building insurance, so the insurance coverage on the structure is insured by the Condo Association under one “Master Policy.”
It seems logical that the Master Policy covers the building and each unit owner covers their belongings inside the condo, but it is not that simple. Master policies are subject to the Condo Association by-laws. This document is very important at time of loss. It defines what each unit consists of. For some associations, it is the interior walls all the way to the outside of the building. For others, it covers only the interior studs to the outside. The later would make the individual unit owner responsible for the floor, drywall, paint, interior trim and many other costly parts of their unit.
Coverage can be purchased for “Real Property” (building coverage) that the unit owner is responsible for, but you must ask for this optional coverage. Only a small limit (usually $1,000), is automatically provided for Unit Owners Real Property.
In addition, condo by-laws allow for assessments to all unit owners in the event a loss to the buildings is not adequately covered. For example, say a major fire destroyed a building in a condominium complex. The individual building was insured for $200,000, but the cost to rebuild is $250,000. The association has the right to assess each unit owner their proportionate share of the $50,000 deficit. This type of loss can also be covered under each unit owner’s condominium insurance policy. However, the limit provided is small, usually $1,000, but the amount can be increased.
It is important to know how your condo association by-laws define your unit and how the association has covered the building in the Master Policy. Our agency will gladly review your by-laws from an insurance perspective. Just give us a call.
“Condo policies are subject to the Condo Association by-laws.
It defines what your insurance must cover. “
A policy designed for the special needs of condominium unit owner-occupants to cover personal property and liability, to complement the insurance normally purchased by the condominium association for the building, structures and liability. Additional coverages are offered unit owners by many insurers.